Just saw a very detailed analysis by Isaac here: https://seedly.sg/questions/stock-discussion-ge...
Should be useful for you to make a decision :)
Business Profile: Most of us are familair with Resorts World Singapore (RWS), one of the largest integrated resorts in this region. We are quite familair with Universal Studios and the casino but F&B outlets, retail and hotels are all part of the business model. Since 2010, RWS has garnered a lot of media attention since their opening.
Income Statement: Revenue has been on an upward trend since 2016, but FY18 revenue is still lower than their initial highs when they just opened. Profitability wise, most of the gross profit, operating income, EBIT and net profit margins have all improved over the years, which is quite a healthy sign. This can be attributed mainly to operating expenses increasing proportionally less then revenue, and "other income/expenses" turning a positive.
Balance Sheet: Genting Singapore has a very strong short term liquidity position, with a current ratio of more than 5 and a cash ratio of almost 5 as well. The large base of current assets comprises mainly of 93% cash. This could mean that the company is hoarding too much cash, and should be using the cash to drive growth or to explore new opportunities. This may not be too good an indicator since it could mean that management is either reluctant to grow, or can't look for new opportunites to grow.
Cashflow Statement: Cashflow from operating activities seem quite healthy, especially considering that capex is only 10% of operating cashflows. Their estimated Free Cashflow (FCF) is roughly 1m (operating cashflow minus capex), with a high FCF margin of almost 40%. This strong cashflow position has also allowed it to have a dividend payout ratio of more than 50%. Their strong positive cashflows could be one of the reasons why their cash balance is so high.
Valuation: DBS Treasuries has maintained a buy call on Genting Singapore, concluding that the current EV/EBITDA of 7.7X should be trading at their average of 12X. They maintain that the effect of slower gross gaming revenue in Macau and a slow down of China has been appropriately priced, but their improved earnings over the last few years justifies a higher valuation than the market.
Just saw a very detailed analysis by Isaac here: https://seedly.sg/questions/stock-discussion-ge...
Should be useful for you to make a decision :)
Business Profile: Most of us are familair with Resorts World Singapore (RWS), one of the largest integrated resorts in this region. We are quite familair with Universal Studios and the casino but F&B outlets, retail and hotels are all part of the business model. Since 2010, RWS has garnered a lot of media attention since their opening.
Income Statement: Revenue has been on an upward trend since 2016, but FY18 revenue is still lower than their initial highs when they just opened. Profitability wise, most of the gross profit, operating income, EBIT and net profit margins have all improved over the years, which is quite a healthy sign. This can be attributed mainly to operating expenses increasing proportionally less then revenue, and "other income/expenses" turning a positive.
Balance Sheet: Genting Singapore has a very strong short term liquidity position, with a current ratio of more than 5 and a cash ratio of almost 5 as well. The large base of current assets comprises mainly of 93% cash. This could mean that the company is hoarding too much cash, and should be using the cash to drive growth or to explore new opportunities. This may not be too good an indicator since it could mean that management is either reluctant to grow, or can't look for new opportunites to grow.
Cashflow Statement: Cashflow from operating activities seem quite healthy, especially considering that capex is only 10% of operating cashflows. Their estimated Free Cashflow (FCF) is roughly 1m (operating cashflow minus capex), with a high FCF margin of almost 40%. This strong cashflow position has also allowed it to have a dividend payout ratio of more than 50%. Their strong positive cashflows could be one of the reasons why their cash balance is so high.
Valuation: DBS Treasuries has maintained a buy call on Genting Singapore, concluding that the current EV/EBITDA of 7.7X should be trading at their average of 12X. They maintain that the effect of slower gross gaming revenue in Macau and a slow down of China has been appropriately priced, but their improved earnings over the last few years justifies a higher valuation than the market.