Yokohama IR seen proceeding with Genting as winner: Maybank

Yokohama is likely to proceed with its IR plans following upcoming mayoral elections and a partnership between Genting Singapore and Sega Sammy is likely to be the preferred bidder, Maybank wrote in a report.

The firm has a “buy” rating on Genting Singapore and says even if the Yokohama scenario doesn’t pan out as it expects there is little downside risk as investors have not factored a win into the share price.

Yokohama will hold mayoral elections on August 22 with eight candidates currently in the race, many of whom have campaigned on a promise to scrap the city’s casino plans. Incumbent Mayor, Fumiko Hayashi, is running for a fourth term and is the only opening pro-IR candidate.

Genting Singapore is running against Macau’s Melco Resorts & Entertainment in the race.

The Singapore-based operator of Resorts World Sentosa reported 1H21 core profit of S$111.5 million on Thursday, which Maybank said exceeding its expectations, though was helped by one-off items such as bad debts written back of $24.7 million.

Gaming revenue was flat quarter-on-quarter despite the operating capacity limit of Resorts World Sentosa being cut from 65 percent to 50 percent on May 4 and 50 percent to 25 percent on May 16.

“The only thing working against RVS was luck factor,” it said. “Thus, we conservatively leave our earnings estimates unchanged for now.”

Maybank said that it expects the company’s earnings outlook for 2H to be stable, with potential upside from 4Q21 as Singapore reopens borders after achieving herd immunity.