Genting Singapore is likely to have a “somewhat better” 2016 after a disappointing 2015 when shares fell 29 percent, says Japan-based brokerage house, Nomura.
Nomura is cutting its target price on Genting Singapore to $0.80 from $0.89 and will continue to rate the company’s stock at neutral. However, weakness in Singapore’s tourism market and economic trouble in neighboring Malaysia and Indonesia will be a drag, as well as the continued impact of lowered Chinese VIP customers in the region.
In 15Q3, Genting Singapore reported weaker-than-anticipated results as it lost market share to rival Marina Bay Sands. Gross gaming revenue was S$659 million ($464.7 million), representing a year-on-year decline of 19 percent.
According to Bernstein analysts at the time, VIP remains challenging for the company as it reconfigures its VIP business model and continues to reduce extension of credit to VIP players.
“Singapore is experiencing a continuing slowdown in VIP visitation, which is negatively affecting the VIP gaming business in the country,” said analysts at Nomura.