Brokerage Morgan Stanley Asia Ltd says that Singapore “might see a structurally higher market size” in terms of gross gaming revenue (GGR) post-Covid-19, compared to pre-pandemic times, “because of excess cash/liquidity/money parked by affluent Asians in Singapore”.
“We expect 2023 and 2024 Singapore GGR at US$4.4 billion and US$5.2 billion versus US$4.6 billion in 2018,” wrote analysts Praveen Choudhary and Gareth Leung in a memo this week.
The institution said it expected “Singapore GGR could surpass its previous 2018 peak in 2024 and 2025 as more affluent Asians relocate to Singapore”. That market’s mass and slot revenue “could contribute more to GGR post-Covid (65 percent of GGR versus 60 percent pre-Covid),” it added.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) for the city-state’s gaming industry might reach SGD3.18 billion (US$2.44 billion) this year, and grow to SGD3.74 billion in 2024.
Singapore is home to a casino resort duopoly: Resorts World Sentosa, operated by Genting Singapore Ltd; and Marina Bay Sands, run by a unit of Las Vegas Sands Corp.
In Monday’s note, Morgan Stanley said it expected Genting Singapore to report annualised EBITDA of US$1.1 billion for full-year 2022, “90 percent of the 2018 peak”. The brokerage said it anticipated the casino firm’s fourth-quarter EBITDA “to be up 10 percent quarter-on-quarter”.
“While we expect dividends to recover gradually, visitation, revenue and EBITDA recovery momentum in 2023 will be the catalyst for the stock,” stated the analysts.
They added: “Genting Singapore’s third-quarter 2022 GGR was already at 80 percent of the pre-Covid level, and we expect the benefits of Chinese tourists coming back to Singapore could become visible in first-quarter 2023 and second-quarter 2023.”
Singapore’s international visitor arrivals for 2023 are forecast to double at least, to between 12 million and 14 million, relative to the 6.3 million achieved in 2022, said the Singapore Tourism Board in mid-January.
