22 April 2014

Genting Singapore AGM - April 2014

Today I attended Genting Singapore AGM held at Resort World Sentosa Convention Center. Below are some of the keynotes taken from AGM:

  1. Jeju Integrated Resort is the next major project the group is working on. It is targeting more than 800 million population within 1 hour flight. The site of the Jeju integrated resort is 2.5 times bigger than Resort World Sentosa. It is expected to be funded through internal funding (about US$300 Million - US$500 Million) as well as the cash flow from residential project. According to the group, it is very hard to get onshore financing from Korea. It is coincidence with the proposed 1 cent dividend. 
  2. Chairman Tan Sri Lim mentioned that Genting Singapore is a growing company and hence it is necessary to retain earnings for future investment. He mentioned that the dividend payout will grow as and when the company financial condition is improved. 
  3. There are about 60 thousand members under the loyalty program. Currently the group is promoting the annual membership fees at S$150 per year. So it is another way for the group to receive additional cash flow as well as parts of the branding & customer loyalty efforts. 
  4. Chairman and CEO shared that it is part of the business requirement to set aside bad debt provision, especially for VIP customers division which taken into account for 50% of total revenue. It seems that the VIP customers would have a upper hand when they could actually receive preferable credits from most of the casino operators as they contribute the most of the total revenue of the group. Nonetheless, CEO stressed that they have certain credit risk policies (e.g. Know Your Client etc) to manage the risks.
  5. Jurong Hotel is targeted to be completed by 2015. 
  6. The reasons given by CEO that the remuneration were increased by more than 30% due to:
    • It is necessary to form and retain a sold team to manage the company in well condition, in long run
    • Tighter rules & regulation set by CRA  that require the board of directors to comply with, hence it is harder for BOD to follow it completely
  7. Universal Studio Singapore is currently fully managed by the company based on franchise model. The franchise term is 15 years and renewable after that. 
  8. The group is currently in preparation to participate in the bid of Japan casino license as Japan market is estimated 2 - 3 times bigger than Singapore market. 

My View
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It is good time to buy if you are a long term investor who is targeting for long term growth instead of high dividend payout. However, you have to think twice if you are investor who targets on high dividend yield as it is lower than bank saving rate currently. As the company is investing heavily in Jeju IR project, I think the earnings would definitely grow and higher dividend payout would come later after the whole IR project is completed. 


Japan casino license is a big catalyst for the company. Nonetheless, it is too early to take it into consideration as it is still not in confirmed yet. 

As Singapore environment is different from Macau, hence it is difficult to compare Genting Singapore against its peers. Overall, I am still satisfied with company performance but it could always do it better. 

7 comments:

  1. This comment has been removed by a blog administrator.

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  2. Really informative. I just read this article: Procter & Gamble Profit Rises On 6% Boost In Home Care Products. Read it here http://bit.ly/PuXznu

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  3. Hi, what is the door gift this year ? Membership points ?

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    Replies
    1. Too bad there is no door gift but only a lunch box with drinks & an apple. An apple a day keep doctor away. :)

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  4. Hi , are you attending this year? Do u need to register beforehand to attend?

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  5. I think that Japan casino a little bit strange thing. I prefer ordinary casinos https://casinority.com/most-expensive-casino-buildings-ever/ Last year my friend was at The Venetian. He was impressed and happy to be there

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