Brokers' take: Maybank upgrades Genting to 'buy' after MBS posts recovery

MAYBANK Singapore has upgraded Genting Singapore to “buy” from “hold” after competitor Marina Bay Sands (MBS) saw a recovery in its earnings in the second quarter of 2022.

MBS was the star net revenue contributor to Las Vegas Sand’s top line for the quarter, delivering US$679 million compared with US$327 million in Q2 2021.

The research team noted that the results reflect operations after Singapore opened its borders on Apr 1 and removed Covid-19 testing requirements on Apr 26.

The read on MBS’ results is favourable for mainboard-listed Genting Singapore’s Resorts World Sentosa (RWS), said analyst Yin Shao Yang in a report on Thursday (Jul 21). He added that MBS operations recovered faster than expected even without Chinese gamblers.

Despite the comparison, Maybank has warned investors not to draw a 100 per cent identical comparison between MBS and RWS, as RWS had likely ceded market share.

On top of upgrading its call on the resort operator, Maybank has raised its target price on Genting Singapore to S$0.85 from S$0.83. This represents a potential upside of 4.9 per cent from the counter’s closing price of S$0.81 on Friday. Genting ended the day up 4.5 per cent or S$0.035.

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Strong recovery at MBS props up Las Vegas Sands’ earnings in Q2

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Additionally, the research team has raised its estimates for Genting’s FY2022 earnings by 78 per cent to account for an earlier recovery. Its long-term earnings estimates are “little changed” for now, but there is room for positive earnings revisions if China eases its zero-Covid-19 policy.