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UOBKH and Citi are upbeat on the gaming sector following record high earnings from tourism and concerts

Nicole Lim
Nicole Lim • 3 min read
UOBKH and Citi are upbeat on the gaming sector following record high earnings from tourism and concerts
PUOBKH has a “buy” call on Genting Singapore, while Citi has a “buy” on Las Vegas Sands. Photo: Samuel Isaac Chua/The Edge Singapore
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UOB Kay Hian (UOBKH) and Citi Singapore are upbeat on the gaming sector, following record high earnings, as major entertainment events help drive up tourism numbers.

UOBKH’s Jack Goh maintains “overweight” on the gaming sector with a “buy” on Genting Singapore G13 -

and a target price of $1.25. Meanwhile, Citi’s George Choi has a “buy” call on Las Vegas Sands with a higher target price of US$75 from US$74 previously, mainly reflecting the 5%-10% higher ebitda forecasts on Marina Bay Sands (MBS). 

Goh from UOBKH highlights MBS’ all-time high quarter for the 1QFY2024 which he says was well above pre-pandemic levels. 

MBS’ adjusted ebitda surged about 10% q-o-q to US$597 million, the highest quarterly figure since its opening and well exceeding 2019’s numbers, while its net gaming revenue improved 15% q-o-q and exceeded pre-pandemic levels. 

On a constant currency basis, the mass market’s 1QFY2024 gross gaming revenue (GGR) improved 16% q-o-q, while VIP GGR rose 12% q-o-q. 

Goh expects Genting Singapore to follow in MBS’ footsteps and rake in higher tourist arrivals and spending from Taylor Swift’s six sold-out Eras Tour concerts in the first quarter of 2024. 

See also: Analysts raise target prices for Centurion Corp following healthy 1QFY2024 results

He notes stronger q-o-q operating matrices were anticipated during the Chinese New Year festival and accelerated growth of international tourist arrivals (including from China) upon ramp-ups of flight frequencies and capacities. 

The analyst is upbeat on the prospects for Singapore’s gaming sector in 2024, featuring a confluence of  positive catalysts such as accelerated tourist visitations momentum, plenty of mega-entertainment events in the pipeline, and a sustained trend of higher spending per capita in the nation. 

Likewise, Choi from Citi says that the Las Vegas Sands’ 1QFY2023 luck-adjusted property ebitda of US$1,161 million beat his forecast by about 7%, mainly attributable to the better-than-expecting gaming volumes and opex management at MBS. 

See also: SAC Capital’s optimism intact on Hyphens Pharma following 1QFY2024 results

The record high ebitda at MBS was achieved despite some of the hotel rooms being under renovation, he adds. With about 770 suites out of the 1.850 rooms in service after the completion of the refurbishment program by Chinese New Year in 2025, MBS expects to achieve a quarterly ebitda of US$600 million. 

Meanwhile in Macau, Choi says that the disruption from the Londoner Phase 2 renovation has been largely priced in, and thus continues to rank Las Vegas Sands as his top global pick. 

As at 3.25pm, shares in Las Vegas Sands are trading at  US$4.35 lower or 8.66% down at US$45.88. On the other hand, shares in Genting Singapore are trading 0.5 cents lower or 0.538% down at 93.5 cents.

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