Monday, March 8, 2010
Genting Singapore -- Thrills and spills await
KUALA LUMPUR: RHB Research Institute has revised its FY10 forecasts downwards by 3.1% for Genting Singapore to push its projected contribution from the Universal Studios Singapore theme park back by 1.5 months to beginning May (from beginning March).
It said on Monday, March 8 that although the the Universal Studios Singapore theme park opens in mid-March, it is discounting the first six weeks of operations to be conservative, given the gradual ramping up of ticket sales and ongoing technical adjustments.
"We continue to highlight a potential for earnings upgrade in our forecasts via: (1) higher revenue per patron due to management's casino target market of "above average" patrons versus our assumption which is based on a VIP:mass split of 50:50; and (2) longer-than-expected casino monopoly in Singapore should Marina Bay Sands open later than April," it said.
It said there was no change to its S$1.35 fair value, based on blended average of EV/EBITDA (12 times FY11 based on regional average) and DCF methodologies. Maintain Outperform.
Universal Studios Singapore theme park is set to open on March 18. Following the sneak peek weeks during the Chinese New Year period, it will first open the park to team members of Resorts World Singapore (RWS) and their families on March 13 for one week as part of its staff appreciation perks, before opening to the public.
Ticket sales for the opening phase will begin on March 10 and same day tickets are not available, while there will be some tickets set aside for hotel guests on a first-come-first-served basis during this soft opening period.
RHB Research said the management had highlighted however, that this was a progressive soft opening for Universal Studios Singapore theme park, not unlike the casino, which means that limited tickets will be sold and that it is possible that certain attractions may become temporarily unavailable as it continues its technical and creative adjustments during this period.
To compensate for this, ticket prices will be partially rebated by shopping and dining vouchers valid for use at the theme park. There was no mention as to how long this preview/soft opening�h phase will last except to say that it will end when RWS is satisfied that the park is ready.
"Nevertheless, we understand that on the first day Universal Studios Singapore only intends to sell 3,000 tickets, versus its full capacity of 30,000, but would gradually ramp up the number of tickets sold over the next two to three months, with the jump between each stage of capacity to be relatively large (for eg: from 3,000 to 10,000 tickets)," it said.