SINGAPORE (Nov 4): The wheels of fortune are turning back in favour of Genting Singapore (GENS).

Analysts are betting on the stock to beat the challenging gaming environment after GENS on Thursday declared a surprise interim dividend per share (DPS) of 1.5 cents on the back of “outstanding” 3Q results.

GENS’s 3Q adjusted EBITDA doubled from the previous quarter to $233.6 million. Compared to the same period last year, adjusted EBITDA grew 12%.

In a report on Thursday, CIMB analyst Jessalynn Chen called it “an outstanding earnings beat in a challenging gaming environment”.

“Adjusted EBITDA margin of 40.2% was the highest in nine quarters,” says Chen.

See also: <a class='gtm_see_also_1_inread' style='text-decoration: underline;' href='/capital/brokers-calls/dbs-says-it-remains-buyers-digital-core-reit-after-further-downside-price?utm_source=website&utm_medium=article&utm_campaign=ONPAGESEO'>DBS says it remains buyers of Digital Core REIT after further downside in price</a>

Net gaming revenue and non-gaming revenue both grew, by 23% q-o-q and 17% q-o-q, respectively. But the highlight, Chen says, was a 28% y-o-y drop in expenses due to cost efficiency initiatives implemented in the previous quarter.

(See <a href="http://www.theedgemarkets.com.sg/sg/article/genting-singapore%E2%80%99s-3q-earnings-more-quadruple-107-mil">Genting Singapore’s 3Q earnings more than quadruple to $107 mil</a>)

CIMB is keeping its “add” recommendation on GENS with an unchanged target price of 89 cents.

In addition, the research house is raising its forecasts for GENS’s earnings per share (EPS) in FY16-18 by 7-17% on the back of lower expenses and bad debt charges. This was partially offset by lower gaming volume.

See also: <a class='gtm_see_also_2_inread' style='text-decoration: underline;' href='/capital/brokers-calls/rhb-sees-frasers-centrepoint-trust-potential-contender-mercatus-assets?utm_source=website&utm_medium=article&utm_campaign=ONPAGESEO'>RHB sees Frasers Centrepoint Trust as potential contender for Mercatus assets</a>

Maybank Kim Eng, too, is encouraged by GENS’s “stellar” 3Q performance, but expressed concerns over gaming volumes that “remain at record low levels”.

“We continue to have concerns regarding the continued weakness of VIP volumes and mass market gross gaming revenue,” says Maybank Yin Shao Yang in a Friday report.

Maybank is upgrading GENS to “hold” with a marginally higher target price of 72 cents, from 71 cents previously.

“The stock appears fairly valued given the limited downside to our target price,” says Yin.

As at 12.09pm, GENS is trading 9.9% higher at 83.5 cents.

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