not vested
Genting Singapore – Let Fortunes Roll [财源滚滚]
While people try their luck, investors are rolling their fortunes with Genting Singapore. The stock has been on tear since the beginning of the year.
After closing 2018 at $0.975, stocks of Genting Singapore have risen to $1.11 to register a year-to-date return of 13.9 percent as of 21 January 2019. On the other hand, local benchmark Straits Times Index only recorded a rise of slightly above six percent.
After Naga2 opened in Phnom Penh of Cambodia in November 2017, concerns of VIP volumes have waned as 2Q18 marked a turning point where trade receivables for Genting Singapore hit a record low of $111.9 million. This gives scope for Genting Singapore to loosen its credit policy to lure back the VIPs.
Meanwhile, based on latest data from Singapore Tourism Board, inbound tourist arrivals continued to grow in the months of October and November 2018 (December data not out) and hence why there could be some surprise in Genting Singapore’s upcoming 4Q18 results.
That said, there may be some major capex announcement for the integrated resort (IR) operator in 2019, as the government has identified Pulau Brani and the Greater Southern Waterfront as areas for future developments. Genting Singapore could very well be participating in the development given the proximity of the Sentosa and Pulau Brani.
Lastly, Japan is slated to issue licenses for three IRs in 2H19 of which Genting Singapore is expected to be amongst the top contenders. After having disposed its stakes in its South Korea venture on Jeju Island, Genting Singapore has propped up its balance sheet to focus on its Japan’s foray.
At the current share price, Genting Singapore is changing hands at a price-to-earnings (P/E) multiple of just 17.3 times despite the many potential catalysts. Notwithstanding that, its indicative yield is a decent 3.2 percent.
Source: Shares Investments