Genting Malaysia and Genting Singapore should benefit greatly from the return of Chinese visitors in 2024, according to brokerages Hong Leong Investment Bank (HLIB) Research and Maybank.
HLIB Research expressed confidence that the recovery trajectory of the gaming sector in Malaysia and Singapore would be sustainable, thanks to the restoration of global flight capacity and the recent visa-free travel pact between China and both countries.
Singapore’s tourism recovery continued at pace in 2023, with 12.37 million arrivals in the first 11 months – almost double the 6.31 million full-year 2022 figure, but still far from the 19.12 million visitors in pre-pandemic 2019.
Meanwhile, Malaysia reported 26 million tourist arrivals between January 1 to November 15, 2023, more than double the numbers reported in the previous year.
‘Resorts World Genting and Resorts World Singapore (RWS) are poised to gain from the anticipated revival of Chinese tourists, a crucial client segment for the gaming industry,’ the investment bank pointed out.
‘While Singapore and Malaysia showed resilience as destinations for Chinese travellers in the third quarter of 2023, it’s important to note that travel volumes were still 21 percent and 32 percent below 2019 levels, indicating further potential for recovery.’
Genting Singapore reported an adjusted EBITDA hike of 68 percent to SG$452.5 million ($336 million) in the first half of this year, as consolidated revenue rose by 63 percent yearly to SG$1.1 billion ($817 million).
‘Looking ahead to 2024, major music events like the Coldplay and Taylor Swift concerts in Singapore are expected to play a significant role in boosting tourist arrivals, particularly benefiting RWS,’ HLIB added.
A dispatch by investment bank Maybank, also underlined that Genting Singapore should be the main beneficiary of this recovery, considering the boost it gave the company in the previous year.
‘The return of Chinese tourists en masse in 3Q23 drove RWS mass market
gross gaming revenue to 8 percent above the FY19A quarterly average and VIP
volume to 36 percent above the FY19A quarterly average,’ the investment bank noted.
‘We expect this growth to consolidate and continue in FY24E as seat capacity for flights from China to Singapore recovers. Singapore also recently granted 30-days visa free entry to Chinese visitors. In the long term, we expect RWS VIP volume and
mass market GGR to exceed 2019 levels by c.20 percent.’
As for Genting Malaysia, Maybank estimated RWG visitor arrivals should recover to pre-COVID levels of 24 million this year, a Malaysia recently granted 30-days visa-free entry to
Chinese visitors, with GENM’s earnings set to recover 60 percent year-on-year.
Both brokerages also predicted that Genting would be in the race for a possible integrated resort license in Thailand, in case the country is to advance with gaming legislation.
