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Thailand – Maybank believes Genting Singapore would bid for a Thai casino project

By - 8 January 2024

Investment bank Maybank believes Genting Singapore could put itself forward to invest in an integrated resort casino in Thailand if the opportunity were to arise to ‘stave off competition’ towards its Resorts World Sentosa casino in Singapore.

Maybank analyst Samuel Yin Shao Yang said Genting would likely form a joint venture to bid for any future projects in Thailand.

He said: “While we acknowledge that Thai IRs are more likely to be a threat to Genting Singapore than to [Resorts World Genting operator] Genting Malaysia, we note from history that Genting Singapore is not averse to expanding overseas to partially stave of competition. Recall that Genting Singapore tried to expand into Jeju, South Korea until November 2016 and Yokohama, Japan until September 2021 in order to partially stave of competition from them.

“We do not discount the possibility that Genting Singapore may form a joint venture to bid for a Thai IR license should Thailand liberalize its casino industry.”

He added that Genting Singapore’s revenues should hit pre-COVID levels this year following the return of Chinese players with revenue estimates of US$2bn in 2024.

Mr. Yin said: “We expect most of the growth in gaming revenue this year to come from Chinese tourists. Even before 3Q23, mass market (which traditionally contributes around 75 per cent of earnings) was already hitting pre-COVID levels despite the lack of Chinese tourists due to new migrants and wealth created by higher property prices. The return of Chinese tourists en masse in 3Q23 drove mass market gross gaming revenue to eight per cent above the FY19 quarterly average and VIP volume to 36 per cent above the FY19 quarterly average. In fact, the 3Q23 VIP volume of SGD11.3b was the highest since 2Q15. We expect this growth to consolidate and continue in FY24 as seat capacity for flights from China to Singapore recovers.

“December 2023 seat capacity from China to Singapore currently stands at 87 per cent of December 2019 levels. Singapore also recently granted 30-days visa free entry to Chinese visitors. Thus, we hope that Chinese visitation to RWS will recover completely this year. In the long term, we expect RWS VIP volume and mass market GGR to exceed 2019 levels by around 20 per cent.”

Genting Malaysia meanwhile is being tipped for a 60 per cent year-on-year increase in 2024.

Mr. Yin said: “While Malaysian and Singaporean visitation (around 85 per cent of total visitation pre-COVID) has recovered to pre-COVID levels, Indonesian (around 10 per cent during pre-COVID) and Chinese visitations (around four per cent during pre-COVID) have not. We are hopeful that air connectivity from the latter two source markets will be fully restored this year. It also helps that Malaysia recently granted 30-days visa free entry to Chinese visitors.

“Thanks to the above and despite the service tax hike to eight per cent from six per cent effective 1 March 2024, we expect Genting Malaysia’s FY24E earnings to recover 60 per cent year-on-year.”

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