Malaysia and Singapore's gaming sectors rise thanks to Chinese tourism

12-01-24

The Malaysian and Singaporean gaming sectors are experiencing a remarkable rebound as an increase in Chinese tourists boosts revenues. Relaxed visa requirements and improved air connectivity have played a crucial role in attracting more Chinese visitors to both countries.

Genting Singapore posted substantial growth in its mid-year financial results, with both revenue and adjusted EBITDA up significantly. This improvement was largely attributed to the return of Chinese tourists, a trend that is expected to persist in FY24 as flight options from China expand.

Similarly, Malaysia's gaming sector, represented by Genting Malaysia, is also experiencing a positive turnaround. Maybank has forecast considerable profit growth for Genting Malaysia in FY24. This projection is based on the expectation that the recovery in tourism will continue, with visitor numbers likely to return to pre-pandemic levels.

The optimism surrounding the gaming sector is reinforced by the strong net profit recorded by Genting Malaysia in the third quarter of FY23, a turnaround from the losses experienced in the previous year. This financial turnaround is indicative of the sector's resilience and its potential for sustained growth following increased tourist arrivals.

As the gaming industries in Malaysia and Singapore flourish, with a particular boost from the influx of Chinese tourists, it is worth watching the performance of key players in the sector. For example, W. P. Carey Inc (WPC), while not directly mentioned in the article, offers a pertinent comparison as a company with significant real estate assets, including the leisure sector, which encompasses gaming properties.

InvestingPro's data highlights WPC's solid financial health, with a market capitalization of $14.18 billion and a P/E of 17.84p. The company's revenues have grown by an impressive 22.15% over the past twelve months through Q3 2023, pointing to solid operating performance. Moreover, gross profit margin during the same period was a remarkable 92.39%, underscoring the company's efficiency and profitability.

InvestingPro's tips for WPC emphasize the company's high quality of earnings, as its free cash flow exceeds net income, and its steadily rising earnings per share. These factors are particularly relevant to investors considering the sustained growth potential of the gaming sector, as indicated by positive trends in Malaysia and Singapore. In addition, WPC has maintained dividend payments for 26 consecutive years, which may be of interest to income-focused investors.

For those seeking more information, there are more than 10 additional InvestingPro tips available for WPC at https://www.investing.com/pro/WPC. Now that the InvestingPro subscription is on special New Year's Eve offer with discounts of up to 50% off, it's an opportune time to access in-depth analysis and data. Plus, use coupon code sfy24 to get an additional 15% off a 2-year subscription to InvestingPro+, enhancing your investment research to an even greater value.