The potential expansion of Genting Singapore into Thailand’s casino industry, as projected by Maybank analyst Samuel Yin Shao Yang, marks a strategic move in the company’s pursuit of global growth. Amidst the outlook for 2024 and beyond, several key factors stand out, ranging from potential ventures in Thailand to the revival of Chinese tourism bolstering the company’s revenue streams.
Thailand’s Casino Industry Liberalization:
Maybank’s analysis suggests that Genting Singapore might seize the opportunity to venture into Thailand’s integrated resort (IR) landscape should the Thai government liberalize its casino industry. Based on the company’s past endeavors in Korea and Japan, forming a joint venture for a Thai IR license could be in the cards. This approach aligns with Genting Singapore’s historic initiatives to expand overseas to counter competitive pressures. Previous attempts to enter markets like Jeju, South Korea, and Yokohama, Japan reflect this strategy.
Earnings Recovery and Growth Drivers:
Despite recent tax increases, Genting Singapore’s earnings are anticipated to rebound to pre-COVID levels in 2024, driven largely by the resurgence of Chinese tourists. The return of these tourists is expected to significantly contribute to the growth of gaming revenue. Even before the third quarter of 2023, the mass market segment had been showing promising signs, nearing pre-COVID levels due to factors such as new migrants and increased wealth from soaring property prices. The influx of Chinese tourists in the third quarter of 2023 led to substantial spikes in both mass market gross gaming revenue and VIP volume.
Tourism Recovery and Future Projections:
The anticipated recovery in seat capacity for flights from China to Singapore, reaching 87% of pre-pandemic levels in December 2023, coupled with Singapore’s recent move granting 30-days visa-free entry to Chinese visitors, holds promise for complete recuperation in Chinese visitation to Resorts World Sentosa (RWS). This revival is expected to be a significant driver for growth, potentially exceeding 2019 levels by approximately 20% in the long term, particularly in RWS VIP volume and mass market gross gaming revenue.
Financial Projections and Estimates:
Maybank’s estimates project Genting Singapore’s revenue to soar to SG$2.66 billion (US$2.0 billion) in 2024, alongside Adjusted EBITDA climbing to SG$1.25 billion (US$941 million). These figures reflect an optimistic outlook, primarily driven by the revival of tourism and the company’s strategic maneuvers in potential overseas expansions.
In summary, Genting Singapore’s strategic vision encompasses potential ventures in Thailand’s liberalized casino industry and relies heavily on the resurgence of Chinese tourism to amplify revenue streams. The company’s resilience, as seen in its approaches to counter competition and its agile response to market dynamics, sets the stage for robust growth in the coming years.
Overall, the blend of strategic foresight and adaptability to market shifts positions Genting Singapore favorably for an era of expansion and recovery, backed by promising projections and proactive endeavors.