SGX-listed hospitality company Genting Singapore (SG:G13) has experienced a decline of nearly 20% over the past three months despite the ongoing travel recovery and higher gaming demand. Analysts remain bullish on the stock and anticipate improved performance in the upcoming quarters due to a rise in visitor volumes. They have rated the stock as a Strong Buy.
Genting Singapore Limited functions as an investment holding firm engaged in the development and operation of resorts and casinos.
First-Quarter Earnings
In May, the company reported its Q1 2023 earnings with higher revenues and profits. The company’s net profit jumped to S$129.2 million from S$40.4 million in the same period a year ago. The revenues increased by 54% to S$484.5 million during the quarter. The company that owns Resorts World Sentosa (RWS) witnessed a huge demand from tourists amid the ongoing recovery in global travel.
On the flip side, the recovery in the non-gaming segment was limited by the slower arrival of overseas visitors from its conventional source markets. This led to a 15% decline in overall non-gaming revenue compared to the previous quarter. The adjusted EBITDA decreased by 25% in the quarter, amounting to S$191.7 million, falling short of analyst expectations.
Analysts’ View
Two days ago, Yin Shao Yang from Maybank cut down the price target on the stock from S$1.18 to S$1.12, while maintaining his Buy rating on the stock. The price target implies an upside potential of 20% from the current trading levels. Yang remains confident that the company’s recovery is “still intact” and that it is making progress towards returning to pre-Covid levels by FY2024.
Maybank adjusted its core net profit forecasts for FY2023, lowering them by 12%. Similarly, forecasts for FY2024 were reduced by 6% and for FY2025 by 9%.
Seven days ago, CLSA analyst Sue Lin Lim upgraded her rating on the stock from Hold to Buy, predicting an upside of 34.7% in the share price.
Is Genting Singapore a Buy or Sell?
According to TipRanks, G13 stock has a Strong Buy rating from analysts at an average price target of S$1.24. It reflects 33.1% growth as compared to the recent price of S$0.94.
Conclusion
In the future, the group plans to further improve its product offerings to enhance the attractiveness of RWS as a destination, aiming to generate stronger demand from its target markets. Moreover, analysts anticipate improved performance in the upcoming quarters as the higher frequency of flights subsequently increases visitor volumes.
Genting Singapore’s stock carries a Strong Buy rating on TipRanks.
