Genting Singapore To Potentially Bid for Thai IR and Casino License, Maybank Says

Genting Singapore, owner of the famous Resorts World Sentosa, would likely bid for an integrated resort and casino license in the Kingdom of Thailand. However, for that to happen, the government of Thailand must loosen restrictions on the industry, according to the information provided by Maybank, an investment bank.

Possible formation of a joint venture:

Samuel Yin Shao Yang, an analyst at Maybank, said in a weekend note looking at the outlook for the aforementioned firm for this year and the future, that he projects the firm may want to set up a joint venture for the aforementioned license based on its past achievements in Japan and Korea.

In this regard, he commented: “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 Yokohoma, Japan until September 2021 in order to partially stave of competition from them. Thus, 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.”

Earnings likely to reach pre-COVID levels:

Meanwhile, the said analyst commented that he projects Genting Singapore’s income to go back to the levels it was prior to the beginning of COVID-19 this year, ignoring liabilities from new tax hikes due to the comeback of visitors from China.

Commenting on that, he added, according to Inside mnl168 Asian Gaming: “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% 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 8% above the FY19 quarterly average and VIP volume to 36% above the FY19 quarterly average. In fact, the 3Q23 VIP volume of SGD11.3b was the highest since 2Q15.” 

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This growth is projected to proceed this year as well, as seat capacity for the air transport between China-Singapore recuperates. In this sense, the seat capacity from the last month of the previous year is at 87% of the last month from 2019.

Furthermore, Singapore has approved that Chinese visitors enter the borders of the country without a visa for a period of 30 days. In that regard, Yin added: “In the long term, we expect RWS VIP volume and mass market GGR to exceed 2019 levels by around 20%.”

Relatedly, the income of Genting Singapore will get to SG$2.66 billion, which is approximately US$2.0 billion, during 2024, with Adjusted EBITDA rising to SG$1.25 billion, which is approximately US$941 million, as estimated by Maybank.