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@Furore：On the route to full recovery - $GENTING SINGAPORE LIMITED(G13.SI)$ (GENS) (GENS) booked a 3QFY22 adjusted EBITDA of S$252.8m, which is a significant improvement on both an annual (+146.6% y-o-y) and quarterly basis (+71.9% q-o-q). Its 9MFY22 adjusted EBITDA amounted to S$521.5m, accounting for 76.6% of consensus' full-year estimate, notably above expectations given that recovery in 4QFY22 will be more pronounced. GENS's strong performance during the quarter was largely driven by a sharp rebound in overall gaming volumes and an exceptionally high VIP win rate of 4.8% (typically c.3.0%). GENS' total revenue surged by 49.1% q-o-q and 106.6% y-o-y to S$519.7m, reaching 87% of 3Q19 (pre-COVID) levels. Notably, gaming revenue stood at 106% of 2019 level, led by an increase in overall gaming volumes to an estimated 90-95% of pre-pandemic levels and due to a higher mix of premium customers during the period. Meanwhile, leisure revenue hit 59% of 2019 level during the quarter on the back of a resurgence in tourist arrivals to 45% of pre-COVID19 level in 3QFY22. Outlook continues to be promising despite macroeconomic headwinds, though strong SGD could have a slight negative impact on inbound tourism. Overall indicators suggest that it will be some time before substantial pent-up demand subsides, particularly as countries in the region continue to reopen. While a sustained recovery is anticipated in inbound tourist arrivals, the strong SGD (which has outperformed the majority of Asian currencies and currencies of many other major economies) could have a slight adverse impact on the gradient of the recovery. Nonetheless, GENS is insulated against rising interest rates because of its robust balance sheet, a stark contrast to most other gaming operators in the region. The next two years should reflect stronger gaming volumes and healthier operating margins on greater economies of scale, though a full recovery may remain elusive until traffic from the important China market returns. The stock could be a great add to the portfolio while waiting for China to reopen. A good upside potential could be expected when it does. Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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