Genting Singapore Ltd, the backer of the Resorts World Sentosa casino complex in Singapore, is prepared to “consider expanding into other markets” if projected internal rate of return exceeds 15 percent and group returns on equity recover to more than 10 percent, says a Wednesday note from Maybank Research Pte Ltd, citing management.

First-half net profit at Genting Singapore jumped by 227.7 percent year-on-year, to SGD276.7 million (US$203.0 million), from its portion of the Singapore casino duopoly it shares with Las Vegas Sands Corp’s Marina Bay Sands complex.

Genting Singapore had previously been a suitor for a possible casino licence in Yokohama, Japan. But it shelved its effort in September 2021, after that city’s freshly-elected mayor said the metropolis would not pursue the casino initiative.

In October last year, Genting Singapore said it had cancelled and redeemed “in their entirety” Japanese yen-denominated bonds in the principal amount of JPY20.0 billion (US$135.4 million at current exchange rates).

Last week Moody’s Investors Service Inc said it expected Genting Singapore to generate SGD1.4 billion in operating cash flow “through to December 2024”.

The ratings institution said this would be “sufficient to cover projected capital spending of around SGD1.0 billion, an estimated dividend payout of around SGD0.6 billion, and minimal debt repayment”.

Genting Singapore has a pledge to the Singapore government to spend SGD4.5 billion on a phased expansion of Resorts World Sentosa, which is commonly referred to as “RWS 2.0”.

Maybank said in its Wednesday memo, by analyst Samuel Yin Shao Yang, that a high-profile money-laundering investigation in Singapore – reported to involve SGD2.8-billion worth of assets – had not put off VIP gamblers from coming to Resorts World Sentosa, and that the mass market at the property continued to grow.

Mr Yin wrote that despite the publicity associated with the investigation, Genting Singapore did not see “any discernible decline in its engagement with VIPs whether they be via its private jet programme that was introduced earlier this year or ‘meet and greet’ celebrity events.”

Referring to Singapore’s modest recovery in volume of tourists from mainland China, Maybank stated: “Even without meaningful Chinese visitation, Resorts World Sentosa’s first-half mass market GGR [gross gaming revenue] hit circa 100 percent of first half 2019 levels.”

“We understand slot machine GGR (40 to 50 percent of mass-market GGR) is still trending higher on new migrants to Singapore while mass tables GGR (50 to 60 percent of mass-market GGR) is seeing a lot more meaningful Chinese play relative to first half 2023,” it added.

The bank also cited data from research business OAG Aviation Worldwide Ltd, indicating September flight seat capacity from China to Singapore had recovered to 80 percent of September 2019 levels, compared to a recovery level of only 60 percent in June this year, relative to pre-pandemic trading.

The institution expects Genting Singapore to generate revenue of circa SGD2.25 billion in full-year 2023, and a core net profit of SGD637 million.

The bank’s estimate for Genting Singapore’s earnings performance in 2023 “are based on VIP volume stabilising at 87 percent of 2019 … levels and mass-market GGR growing to 105 percentof 2019 levels,” stated Mr Yin.