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Going Long On Genting Is Not A Gamble
Tradeable, Tradeable Ideas | 14 May 2014
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By: Lim Si Jie
Articles (169) Profile
  1. Genting Singapore Q1 profit surged 77 percent on higher gambling revenue.
  2. Genting is planning overseas developments that can potentially bring in greater revenue upon materialization.
  3. RSI and Stochastics divergence are pointing to an uptrend that is soon to come.

Genting Singapore Q1 Profit Surges 77% On Higher Gambling Revenue

Genting Singapore enjoyed a 77 percent surge in first-quarter net profit as high rollers made greater bets at the casino with the Integrated Resort (IR). The house achieved a higher win percentage against these VIPs.

Genting also recorded a strong 29 per cent growth in gaming revenue to $671.9 million during the quarter, helped by a higher rolling volume and a better win percentage in the premium segment.

Genting’s adjusted earnings before interest, tax, depreciation and amortisation, a measure to gauge operating profitability, surged 60 percent to $400.3 million.

Despite the improved performance, Genting’s gaming revenue continued to lag behind rival, Marina Bay Sands, which benefits from having a location that is much closer to Singapore’s city centre.

Genting Developments For The Future

Genting’s Jurong hotel development is on schedule to open in the middle of next year. Through its subsidiary Tamerton, it had lodged a record bid for the site in Jurong East in 2012. Located between the Malaysia-Singapore Second Link and Resorts World Sentosa, the hotel will serve as a catchment area for tourists arriving from Malaysia.

Genting Singapore is finalizing plans for an integrated casino resort development in Jeju, South Korea. They are in the midst of obtaining the relevant approvals from the local authorities. In addition to the casino, the complex will include luxury hotels, a shopping mall, a theme park and residential facilities.

Genting Singapore is also setting their eyes on the lucrative Japanese market. With the Casino Introduction Bill scheduled to be read in the Parliament within the next few weeks, Genting is planning to partner Japanese institutions which will strengthen their bid to build an integrated resort in Japan.

RSI And Stochastic Divergence

Although Genting’s share prices have been dropping since January 2014, there seems to be a divergence between RSI and the actual share price. RSI is trending upwards with a diagonal upward support even though prices have been falling dramatically.

The same divergence is seen on the stochastics as well. Now that share prices haveconsolidated between $1.30 and $1.36, investors might want to consider to enter into a long position for the long term.

The 20 EMA is also about to cross the 50 EMA, signaling a possible change of trend in prices from downtrend to uptrend.

#Bullish In The Long Run

Although I have not been a fan of riding on news, Genting’s developments for the future are actually very decent proposals that aim to boost its operating revenue and profits in the long Furthermore, my sentiment is supported by the divergence in the charts.

For more passive investors, you might want to wait for more confirmation, i.e. when 20 EMA crosses above 50 EMA and share prices breach the $1.36 resistance.

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Si Jie is no stranger to investing having started his journey at a young age. He is heavily influenced by acclaimed investors such as Benjamin Graham, Peter Lynch, and John Rothchild.

Please click here for more information about this author.

Genting Singapore  0.900 -- --   
Business: Develops, operates & mkts casinos & IRs globally, including Australia, M'sia, Philippines & UK. [FY18 Turnover] Gaming (66.1%), non-gaming (33.8%), others & invs (0.1%).

Insight: May-19, 1Q19, despite Co's non-gaming business reg... Read More

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