Genting Singapore shares fell in early trading after the casino operator missed some analysts' earnings expectations due to impairments and other charges booked in the final months of 2023.
Shares were 9.2% lower at 93 Singapore cents (69 U.S. cents) Friday, on track for their worst one-day percentage loss since 2009. The drop, coming after annual results showed rising levels of tourism activity but also sequential and year-over-year declines in fourth-quarter core net profit, swung year-to-date performance into the red.
Maybank analyst Yin Shao Yang described the earnings as a miss due to higher-than-expected depreciation and a "kitchen sinking" exercise in the fourth quarter. The analyst trimmed profit estimates to reflect higher impairment of trade receivables and depreciation and cut the target price to S$1.16 from S$1.21.
Still, he kept a buy rating, noting that the depreciation is noncash and that many of the charges that hurt the bottom line were one-offs. The analyst also highlighted rising numbers of Chinese travelers and lower expected impairments in the future.
Citibank analysts George Choi and Ryan Cheung likewise flagged an earnings miss while keeping a buy rating and trimming the target price to S$1.16 from S$1.20. On the downside, they raised their forecast for bad-debt provisions due to the trade receivables impairment. On the upside, they highlighted a stock currently trading below its historical average and said they expect the company to benefit from a solid events lineup in Singapore.
Sophie Chua Siu Li of Hong Leong Investment Bank kept a buy rating while raising her target price slightly, citing Singapore's recovering tourism industry and lower-than-expected costs. She said she liked the improved performance in the year's second half, adding that China tourist levels have plenty of room to rise, considering that fourth-quarter numbers were still 54% below 2019 levels.
Comments