3 signs that Genting's earnings will recover in 2017

Improving VIP volumes is one.

Following two tough years, DBS believes now is the opportune time to buy into a highly cash-generative business in a two-player oligopoly.

"We believe 2017 will mark a recovery in earnings (22% jump in adjusted EBITDA) due to (i) recovery in VIP volumes as volumes bottom out this year (we have penciled in a 3% improvement), (ii) normalising VIP win rate to the 2.85% theoretical rate from c.2.6% in 9M16, and (iii) easing of bad debts given GENS’s more selective and conservative credit policy over the past year."

Here's more from DBS:

Based on our analysis of GENS's cashflow generation and net cash of c.S$3.7bn, balanced against the redemption of its perpetual securities and potential bid for a Japanese casino, we estimate that GENS has the ability to increase its dividend to 6 Scts per annum up (translating to a 6.3% yield) from our FY15F DPS 3 Scts.

We believe the positive market response following the declaration of a 1.5-Sct interim dividend will encourage GENS’s management to return more cash back to its shareholders. This in turn should continue the rerating post the 3Q16 results.

The people you want to reach are already in this room.

Every quarter, SBR lands on the desks of the founders, CFOs, and directors running Asia's most consequential companies. Every day, they open our newsletter and read our website. It's a room that took twenty years to build — and it's the one most of our partners are trying to get into.

The good news is that the door is open. We work with companies on thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. The shape of the right partnership depends on what you're trying to do, which is why we'd rather start with a conversation than send a rate card.

If you have something this room should know about, tell us. We'll tell you honestly whether we can help, and how.

No rate cards until we understand the brief. It's a better use of everyone's time.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia