Yokohama IR bid loss won't affect Genting Singapore’s earnings forecast: RHB

Recurring profit for 2021 is expected to reach S$234m.

Forecasted earnings for Genting Singapore will not be affected by the loss in the bid for the Yokohama integrated resort, according to RHB.

RHB noted that the Takeharu Yamanaka who won the recent Yokohama mayor election opposed the integrated resort (IR) and it was reported that he intends to withdraw Yokohama from the bidding process to host a casino.

“As things stand, it looks unlikely that GENS will be able to participate in this bid. Nevertheless, we make no changes to our earnings forecasts and TP (target price) as we did not impute any potential Yokohama IR win,” it said in a report.

The recurring net profit of Genting is expected to reach S$234m by end-2021 with net profit growth of 88.9%. By December 22, recurring net profit is expected to reach S$529m, with recurring net profit growth of 126.4%.

RHB noted that Genting is the main beneficiary of the gradual reopening of economies as more countries reach higher vaccination rates. It noted that Singapore has fully vaccinated about 80% of its population and plans to open more economic activities and allow more quarantine-free travel.

By 8 September, travellers from Hong Kong, Macau, Mainland China, and Taiwan and vaccinated travellers from Brunei and Germany who have tested negative for COVID-19 can enter the country without quarantine.

“Whilst we do not expect a full recovery of foreign visitors to Resorts World Sentosa (RWS) in FY21, the gradual reopening of borders and quarantine-free travel signify that the worst is over for the tourism industry,” it said, adding that guest capacity of non-gaming facilities at RWS resumed to 50% since 19 August from 15% after Phase 2 Heightened Alert restrictions.

Genting Singapore reported an $88.21m profit in the first half following a $116.68m loss in the same period last year.