Genting Singapore Earnings: Strong Recovery to Over Prepandemic Levels; Raising Fair Value 2%

We've raised our fair value estimate for narrow-moat Genting Singapore to SGD 0.98 per share from SGD 0.96 following strong third-quarter results that included revenue and adjusted EBITDA well above 2019 levels. The pace of recovery is ahead of our expectations. We think that, given Genting Singapore’s higher reliance on VIP and premium demand versus peer Marina Bay Sands, rising flight capacity from key premium client markets helped to boost traffic to Genting. In particular, scheduled seat capacity between mainland China and Singapore reached 77% of 2019's level in the third quarter from about 50% in the prior quarter. We expect improving flight capacity to drive further upside, and we've raised our forecasts for 2023-25 revenue by 3%-9% and adjusted EBITDA by 12%-13% to reflect a stronger-than-expected growth outlook. We think the shares are currently undervalued.