RWS should free the doplhins because bad luck continues to dog Genting Singapore.
In what Genting Singapore called a prudent move in the face of a slowing global economy and tightening credit conditions in China, the company raised its bad debt provisions to S$56.9 million for the third quarter, up from S$23.5 million a year ago.
That equates to 8.5% of its gaming revenue, higher than the average of 3% the past six quarters, Citigroup wrote.
‘However, this is in contrast to Marina Bay Sands, which has not shown higher provisioning, so we wonder if Genting Singapore’s decision was driven by its aggressive credit extension that was seen in the first half of the year,’ Macquarie Equities Research analysts wrote.
There are concerns that its flagship casino, Resorts World Sentosa (RWS), continued to cede market share in both VIP and mass gaming segments to rival MBS.
“Genting Singapore lost significant gaming market share in 3Q11 and also did not see any ramp-up in non-gaming,’ the Macquarie report said. ‘We believe the VIP market share loss is more driven by lack of a competitive product relative to MBS.”
‘We find it interesting that notwithstanding Genting Singapore adding more table game capacity, slots and electronic table games (ETGs) (quarter-on-quarter), mass market failed to ramp and showed 2 per cent QoQ growth. This essentially means that table, slot and ETG yields all declined QoQ – at a time when there was available hotel room capacity,” the Macquarie report said.
The scheduled opening of Bayfront MRT at MBS may also shift some mass-market players away from RWS, it said.
Err maybe freeing the dolphins will help dispel the bad luck?
BTW, Morgan Stanley and OCBC are bullish on the stock.