Singapore locals continue to support the market

Friday 29th of January 2021

Singapore’s local residents are continuing to support the island’s two integrated resorts, with Q4 results confirming a trend noted the prior quarter.

In Q3, analysts were surprised by the strength of the local market, but were unsure how sustainable the rally would be. As the first results from the final quarter of the year are published, analysts have once again been pleasantly surprised.

Las Vegas Sands’ Marina Bay Sands saw operating profit in the quarter surge 106 percent from the prior quarter to US$144 million.

“We gather that Genting Singapore’s Resorts World Sentosa will exhibit similar trends when it releases its 4Q20 results on 9 Feb 2021,” Maybank Kim Eng analyst Samuel Yin Shao Yang said in a note.

He is keeping his call for a “buy” on Genting’s stock and for a 95 cents target price on the shares after seeing MBS turn in a strong performance.

“We also do not discount the possibility that Genting Singapore will announce a final dividend per share then as we expect the ‘RWS2.0’ capex plan to be largely deferred,” he adds, referring to a S$4.5 billion expansion plan for the resort.

Yin said MBS’s outperformance was largely due to the fact it has been allowed to increase operating capacity from 25 percent to 50 percent from mid-September.

“We also gather that MBS casino was also open to all guests from 9 Oct 2020. It was previously open only to Sands Rewards members,” he said.

Las Vegas Sands’ Q4 earnings were ahead of consensus forecasts largely due to strength in Singapore. Bernstein Research notes the slot business is now almost back to pre-pandemic levels, while both retail and food and beverage were seeing strong support.

However, Bernstein cautions that without international travel further growth might be difficult to achieve.

Singapore's "locals," include a large expatriate community and slot play is favoured over the table games business.

Singapore has been introducing travel bubbles and has arrangements in place with China, Brunei, Vietnam, Germany, Australia and New Zealand and a one-way corridor with Taiwan. However, an accord for a link with Hong Kong has been postponed due to rising cases in the latter.