RWS said that its $4.5 billion development investment will add more than 164,000 sq m, about half of its current gross floor area. This will include a new waterfront lifestyle complex housing two hotels, retail spaces and eateries. There are also plans for an unmanned shuttle to run along the Sentosa Boardwalk, which connects the resort island with VivoCity.
New experiences will open every year from 2020 until the expansion is completed in 2025, RWS said in a statement.
RWSPL will undertake the expansion of the IR over an expected period of five (5) years. This will
see the existing IR property expanded with approximately 50% of new gross floor area (“GFA”),
adding 164,000 square metres of GFA of leisure and entertainment space. Developments and
enhancements that will be carried out in connection with the Expansion Development, include the
following:
(a) expansion of Universal Studios Singapore, with two (2) new highly themed and immersive
environments – Minion Park and Super Nintendo World;
(b) expansion of the S.E.A. Aquarium to be re-branded as "Singapore Oceanarium";
(c) conversion of the Resorts World Theatre into a new Adventure Dining Playhouse;
(d) expansion of in-resort accommodation with up to 1,100 more hotel rooms at a new waterfront
lifestyle complex and within the central zone of Resorts World Sentosa ("RWS");
(e) an enhanced waterfront promenade to be lined with restaurants and retail outlets, and a
spectacular public attraction;
(f) expansion of Meetings, Incentives, Conferences and Exhibitions (MICE) facilities which will
bring in more events into Singapore; and
(g) development of a driverless transport system ("DTS") which will enhance last-mile
connectivity to bring greater footfall to RWS and the rest of Sentosa Island.
The exclusive rights to run a casino here extended until the end of 2030. But their gambling revenue will be further taxed by the Government. In order to rein in problem gambling, casino levies on Singapore residents will be increased. The daily levy will go up from $100 to $150 from Thursday (April 4), while the annual levy is being increased from $2,000 to $3,000.
RATIONALE FOR THE EXPANSION DEVELOPMENT
The Expansion Development is a significant reinvestment and expansion opportunity for the
Company, setting the stage for the Group's sustained future growth. The reinvestment committed by
the Group reaffirms its vote of confidence in the Singapore market known for its stable and probusiness environment governed by a strong regulatory framework and pragmatic government. When
completed, the expanded IR is anticipated to continue to provide a distinctive purpose-of-visit tourism
experience and further broaden the IR’s appeal to a wider spectrum of premium customers and
millennials. It will integrate with the future Greater Southern Waterfront and is expected to become
the centrepiece of the new entertainment hub of Asia. The Group is well positioned to stay ahead of
the intensifying international and regional competition and will continue to lead the integrated resort
market in Asia as the premium lifestyle destination builder.
FINANCIAL EFFECTS OF THE EXPANSION DEVELOPMENT
The Expansion Development
will be funded by way of internal resources (including operating cash
flows) and/or bank borrowings and the Expansion Development is not expected to have a material
impact on the Group's earnings per share or net tangible asset value per share for the current
financial year.
Looking at the financial results for FY2018, we can see that Genting Sing has cash-on-hands of $4.2b. The borrowing is pretty minimum of $208m.
I think they have no problem to absorb this expansion plan quite comfortably.
Their FCF is also pretty healthy and has no problem to cover their dividend payout .
The selling down from 1.07 to 96 on the next day after the announcement of this expansion plan , I think is overly reacted and purely driven by fear and market sentiment + speculation.
I think market may slowly digest this piece of news and the share price may rise back towards 1.00 and above.
Chart wise, I think it may likely move up to re-capture 1.01 level.
Breaking out of 1.01 with ease plus good volume that may drive the price higher towards 1.05 with extension to 1.10 level.
EPS of 6.27 cents.
PE of 15.7.
Dividend of 3.5 cents.
Yield of 3.55%. Current price of 98.5 cents.
Not a call to buy or sell.
Pls dyodd.
