Broker's take: RHB upgrades Genting Singapore to 'neutral' as RWS reopens attractions

RHB has upgraded Genting Singapore to "neutral" from "take profit", with a new target price of S$0.73 from S$0.64 previously.

This comes as the integrated resort operator reopens its attractions - including the casino, Universal Studios Singapore and SEA Aquarium - with limited capacities and safe distancing measures at Resorts World Sentosa on Wednesday.

At current prices, RHB believes the market has already priced in some of the recovery in its forecast for fiscal 2021, said analyst Juliana Cai in a research note on Wednesday.

As at 12.07pm on Wednesday, Genting Singapore shares were trading flat at S$0.76.

Due to the limitation on operating capacities, RHB does not expect a significant upsurge in sales in 2020. That said, the reopening of attractions marks a "positive first step" to the group in resuming operations, Ms Cai said.

Currently, attractions are restricted to 25 per cent of their respective operating capabilities. The casino is limited only to Genting Rewards members and annual levy holders, while the theme park and aquarium require online advanced reservations for all guests and annual/season pass holders.

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RHB has also made changes to its forecast for fiscal 2021. It now expects fiscal 2021 revenue to be around 90 per cent of pre-Covid-19 days.

Its FY2021-22 forecast earnings before interest, taxes, depreciation and amortisation was cut by about 11 per cent per annum. Meanwhile, the forecast profit after tax and minority interests was reduced by 14 per cent per annum.