No reprieve in sight for battered Genting Singapore in Q4

The gaming giant is playing a losing bet.

There’s no end in sight for Genting Singapore’s woes in the near-term. The gaming giant had previously reported that its profits have plunged 56.9% year-on-year to $88.6m in Q3, as the group continues to feel the impact of lesser China inbound visitors.

According to DBS, there’s no reprieve in sight for Genting, as China’s ongoing anti-corruption crackdown is likely to keep Mainland high-rollers away from Singapore’s casinos for quite some time.

“China has resulted in 3Q14 VIP GGR in Macau and Singapore dropping by 19% and 24% y-o-y respectively. With no clear signs of the anti-corruption drive ending soon and intensifying competition in the mass segment, we believe the headwinds to GENS business will continue. Thus, we see limited re-rating catalysts for GENS near term,” noted DBS.

DBS also noted that Genting is also suffering from uncertainty over the timing of the outcome of the bill to legalise casinos in Japan.

“GENS believe this will occur in Jun/Jul’15 due to the determination of the Japanese government to boost the economy, although on the other hand, there have been press reports that it could be delayed indefinitely. Partially mitigating these headwinds is the scheduled opening of the 550-room Jurong Hotel in mid 2015 which could boost visitors to GENS’ property by 5-7% p.a.. Additional upside could also come from GENS’ proposed Jeju project in Korea, which is awaiting regulatory approval,” DBS stated.