PETALING JAYA: Analysts are optimistic on Genting Singapore Ltd’s odds in securing one of three casino licences in Japan.
“We believe GENS stands a good chance in securing one of the three IRs in Japan, backed by its track record in operating a successful and large-scale integrated resort in Singapore,” said PublicInvest Research in its research note last Friday.
It said being able secure a licence would be a key catalyst for the group although the bidding process and selection of integrated resorts operators would only take place in 2020.
Hong Leong Investment Bank concurred, saying that the possible venture in Japan may act as a huge upswing factor in the near term for Genting Singapore.
Previously, the group has mentioned that the request for concept in Osaka is scheduled for submission in August and the request for proposal will be around end of this year.
For Genting Singapore’s local operations, it is dealing with a challenging VIP market. In the first quarter of this year, it posted a net profit of SG$207.8 million (RM634 million), a 13.5% year-on-year (yoy) decrease, due to lower VIP volume.
“We believe the VIP market segment will be shaken by the rising completion from Asean Casinos (Vietnam, Cambodia and the Philippines). We are also in the view that the weaker yoy results will persist in the subsequent quarters due to weaker VIP business,” said HLIB Research.
In addition, Genting Singapore is also affected by the higher entrance levies imposed by the government.
“The levy is seen as a social safeguard to deter casual and impulse gamblings by locals but we reckon this could affect business volume for the mass market segment from Q2 FY19 onwards,” PublicResearch said.
Genting Singapore Ltd is a principal indirect subsidiary of Genting Bhd and part of the Genting Group. It is ranked among Singapore’s largest public-listed companies.
Source: The Sun Daily