RHB: Genting Singapore could benefit from Hong Kong protests

Genting Singapore’s Resorts World Sentosa; taken 2018Genting Singapore’s Resorts World Sentosa; taken 2018

Genting Singapore could be a beneficiary of the months-long protests in Hong Kong, with Singapore likely to see more mainland tourists seeking an alternate destination in the second half of this year, RHB said in a note Friday.

July inbound tourists to Singapore rose 16 percent on-month and 4 percent on-year, with tourist arrivals from mainland China surging 51 percent on-month and 8 percent on-year, RHB said.

“Higher tourist arrivals could help boost the mass-gaming and non-gaming revenues which could offset the softness in mass-gaming volumes that happened as a result of an increased levy, for local and permanent residents, implemented in the second quarter of 2019,” RHB said.

But it added, it didn’t expect the Hong Kong protests to spur Macau high-rollers to shift to Singapore.

On Wednesday, Hong Kong Chief Executive Carrie Lam’s third policy address to the legislature will be delivered via a live-feed after she was interrupted by heckling from opposition lawmakers when she attempted to speak in person, the South China Morning Post reported.

At a press meeting earlier in the day, lawmakers had played audio of tear gas being fired and protesters screaming, the report said. The months-long protests began in opposition to a bill which would have allowed extradition to the mainland, but even with the bill now suspended, pro-democracy protests against Chinese influence have continued and escalated.

Genting Singapore is also one of three bidders remaining for the Osaka, Japan, integrated resort request-for-concept process, after four of the initial seven contenders dropped out, RHB said, noting media reports indicated the selection process is expected to be completed in spring 2020.

RHB pointed to Genting Singapore filing for a shelf registration statement to issue Japanese yen-denominated bonds in Japan to facilitate raising funds if it is selected to build the Osaka integrated resort.

The brokerage said it expected Genting Singapore’s dividend for the year would remain at 3.5 Singapore cents a share, for a “decent” dividend yield of around 4 percent.

“Longer term, we are positive on GENS on the back of a steadily growing tourism sector. GENS’ S$4.5 billion mega expansion plan,
coupled with the government’s plan to develop the Greater Southern Waterfront would continue to attract footfall to the Resort World Sentosa,” RHB said.

RHB kept a Neutral call on Genting Singapore with a S$0.97 target price.

Shares of Genting Singapore were flat at S$0.92 at 11:59 A.M. SGT.

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