Genting RWS – Market Expectations

Posted: September 17, 2010 in Uncategorized

Can Genting Singapore Hold The Ground?

17 Sept 2010

The million-dollar question is whether Genting RWS could really sustain HOLD % (casino’s win over total Drop) that produce the kind of fantastic results to meet analysts high expectations, as a result of its 2nd quarter performance report.

A brief review by Professional Ground casino panelists, the most plausible scenario would be:

  • For the 3rd Quarter result, RWS casino revenue will stabilize at current level same as its 2nd quarter if not, may improve by additional 10 – 15%.  (The main reason being that it is highly possible RWS has already rally close to 65% of the potential market share in Southeast Asia, leaving Marina Bay Sands with the remaining 1/3. Hence, there isn’t room for exponential growth at this juncture).
  • The key contributing factor in favor of Genting RWS are, strong VIP business with very high win % (luck factor, included) from its Southeast Asian player network.  (40% are from Malaysia, the rest from Indonesia, Thailand and Vietnam).  But the players’ credit risk exposure may gradually become too high for comfort.
  • Coupled with ultra strong revenue from its Slot gaming, with daily per unit win close to S$1,500 – S$1,600 region. This is far superior performance as compared to Macau’s Slot arena.  This segment contributes greatly to RWS’ Ebitda margin.
  • Therefore, we opine that those who think too highly of Genting Singapore target price should take note of gaming market size in Southeast Asia; unless the factor of mainland Chinese players are coming to the Lion City in significant volume.  So far, this is not happening as yet. 

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