Is Genting Singapore still a good bet?

[SINGAPORE] This column predicted late last year that Genting Singapore’s profitability will improve in 2025, and drive a recovery in its beaten down share price.

So far, it has turned out to be a rather poor bet.

Genting Singapore’s shares have chalked up a total return of less than 0.1 per cent since the beginning this year (up to Aug 8). This made it the sixth worst-performing component of the Straits Times Index, which delivered a total return of more than 15.5 per cent.

Worse, the company’s financial results for the first six months of 2025, released on Aug 7, spurred earnings forecast cuts by analysts. At least one research house is now warning that the stock might be on the brink of being booted off the MSCI Singapore Index.

Is it time to fold? Or double down? At the risk of giving credence to the old Wall Street joke that every long-term investment is really a short-term punt gone wrong, it does appear that much of the reasoning this column offered to support the view that Genting Singapore’s luck is about to turn still holds.

In particular, revenue and earnings from its Resorts World Sentosa (RWS) integrated resort will probably improve with the refurbishment of its hotels, and the progressive opening of new attractions under its S$6.8 billion “RWS 2.0” expansion plan.

The dip in the “win rate” at its RWS casino that exacerbated the slump in profitability in the second and third quarters of last year have also reversed.

Moreover, even after all the earnings forecast cuts, Genting Singapore’s shares are still trading at undemanding valuations and offer a decent dividend yield.

In a report dated Aug 11, OCBC Investment Research dubbed 2024 a “year of refurbishments” for RWS, and said the new offerings under RWS 2.0 should drive stronger growth from 2025.

Lost market share?

The trouble is that Genting Singapore’s financial numbers for the first six months of 2025 were weaker than what many analysts were expecting. Revenue for the period declined 10.4 per cent year on year to S$1.21 billion, while net profit fell 34.2 per cent to S$234.7 million.

Its adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) for the six-month period was down 25.8 per cent at S$423.7 million.

Things actually seemed to worsen in Q2 2025. Revenue during the quarter fell 6.1 per cent against Q1 2025 to S$588.3 million, while adjusted Ebitda sank a more significant 20.3 per cent to S$187.9 million.

What went wrong? By most accounts, the weaker profitability was caused by the closure of some attractions at RWS to facilitate construction works related to the RWS 2.0 project, which deterred mass-market gamblers and non-gaming visitors.

This may have benefited rival integrated resort Marina Bay Sands, which reported relatively strong financial numbers for the same period.

“We believe Genting Singapore lost market share, especially for its mass gaming segment, given ongoing renovation works across RWS – which is likely to have turned visitors away from the property,” said CGS International in an Aug 8 report.

RWS’ performance could soon turn around, however, as the disruptions ease and new attractions begin drawing visitors back. Last month, RWS opened its Weave mall, and the new Singapore Oceanarium. The transformation of the Hard Rock Hotel into The Laurus is also expected to help draw more visitors to the integrated resort.

“While Genting Singapore has been losing gaming revenue market share to (its) peers, we believe the roll-out of these projects and the phased completion of its RWS 2.0 attractions from H2 2025 could help (it) drive revenue growth and margins improvement, and regain market share,” said OCBC in its report.

Decent dividend

There are lots of risks ahead, of course. For one thing, the new attractions at RWS are opening amid heightened global economic uncertainty. Singapore’s visitor arrivals in H1 2025 came in at 8.3 million, up only 1.9 per cent versus H1 2024, and down 0.2 per cent against H2 2024.

In November last year, Genting Singapore’s shares slipped sharply after it emerged that RWS’ casino licence would be renewed for only two years instead of the customary three years. The Gambling Regulatory Authority said on Nov 18 that RWS’ tourism performance had been assessed to be unsatisfactory, and that substantial improvement was required.

Nevertheless, even after adjusting their earnings forecasts to account for a disappointing H1 2025 and a possibly slower recovery in 2026 and 2027, some analysts still seem positive about Genting Singapore.

For instance, CGS said it is maintaining its “add” recommendation on Genting Singapore’s shares, despite reducing its earnings forecasts for 2025 to 2027 by between 5.1 per cent and 13 per cent, and slashing its target price for the stock from S$1.05 to S$0.835.

OCBC maintained its “buy” call on Genting Singapore, after cutting its target price from S$1.03 to S$0.96.

Maybank said in an Aug 8 report that it has cut its 2025 earnings forecast for Genting Singapore by 16 per cent but maintained its 2026 and 2027 earnings forecasts. “(The company) missed our expectations largely due to RWS 2.0-related construction works. Yet, we expect this to be transient,” it noted.

The research house reduced its target price for Genting Singapore shares marginally, from S$1.01 to S$1.00.

Genting Singapore closed unchanged at S$0.735 on Tuesday (Aug 12). Based on its 2024 dividend payout of S$0.04 per share, the stock offers a yield of 5.4 per cent. The stock will begin trading ex-dividend for a H1 2025 payout of S$0.02 per share on Aug 27.