VIP volume of Genting's Resorts World Sentosa pegged to balloon 20%

Here are 3 reasons why.

Maybank Kim Eng says Resorts World Sentosa's VIP volume continues to recover YoY on (i) the recovering Chinese economy (ii) improved exportability of the CNY into Singapore via its establishment as a CNY hub and (iii) low base from the preceding year.

Maybank says, "we assume that RWS VIP volume will grow 20% this year before normalizing at 5% p.a. thereafter. That said, we understand that VIP EBITDA margins are relatively lower at 20-30% vs mass market EBITDA margins at 50-60%."

Here's more from Maybank Kim Eng:

We assume that RWS mass market GGR will grow 5% p.a. That said, we estimate that RWS 1H13 mass market GGR grew by a mere 1% YoY which poses downside risk to our estimates.

We believe that this is due to less wealth creation from leveling Singapore property prices.

With the Monetary Authority of Singapore introducing stricter and stricter property curbs, we believe that Singapore property prices and therefore, mass market GGR growth will be suppressed.