Genting Singapore downgraded by Morgan Stanley after weak results

Morgan Stanley Research analysts have downgraded Genting Singapore’s stock rating to equal-weight after weak Q4 results.

With reported adjusted EBITDA of S$190 million ($140.3 million) in the fourth quarter last year, down 24 percent on the same period the year before, and not much short-term potential in Japan and Korea, Praveen Choudhary and Alex Poon have lowered the stock rating.

“Low and flattish dividend, weak VIP outlook, and no near-term EBITDA lift from Korea or Japan take us back to an EW rating,” they said in a note.

“Organic growth remains weak with risk to VIP volumes and increasing likelihood of bad debt provisions.”

Genting’s high-roller trend - VIP roll declined 14 percent in the fourth quarter - is likely to turn more negative with bad debt possibly increasing, they said.

“Management is more cautious in terms of the credit quality of customers and is not accepting as many players.”

 

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