Join our community of smart investors

Shares I love: Genting Singapore

Simon Adler tells Leonora Walters why he invests in Genting Singapore
Shares I love: Genting Singapore
  • Genting Singapore had to close visitor attractions in 2020 due to Covid-19
  • Its revenue fell sharply last year but it has a strong balance sheet

Simon Adler, co-manager of Schroder Global Recovery Fund (GB00BYRJXP30), explains why he invests in Genting Singapore (SIN:G13). The company develops and operates resorts, including Resorts World Sentosa in Singapore. This venue includes a casino, the Universal Studios Singapore theme park, Adventure Cove Waterpark, an aquarium, hotels, restaurants and retail outlets. Genting Singapore accounted for 1.47 per cent of Schroder Global Recovery’s assets at the end of 2020.

“We like to find idiosyncratic risk and an example of that is Genting Singapore,” says Adler. “It owns Sentosa, a very big tourist resort with one of the biggest casinos in Asia. It is in the doldrums at the moment and it’s going to take time for Covid-related travel to recover. But it has virtually no financial liabilities and has [a substantial amount of] gross cash. Genting Singapore is a survivor and a very high-quality asset that we’ve been able to buy at a steal because of temporary issues. We will wait patiently but [expect that in time it] will become one of the busiest tourist hotpots in the world again. And we’ll have bought it at a time when no one can conceive of tourists travelling again so it is really attractive.”

Genting Singapore had to close its visitor attractions and hotels between 6 April and 30 June 2020 due to the coronavirus pandemic. As a result, its revenue last year of S$1.06bn (£570m) was less than half of the S$2.48bn it made in 2019.

However, the company reopened a number of its venues in the third quarter, albeit with reduced capacity. Tan Sri Lim Kok Thay, executive chairman of Genting Singapore, said: “While the severity and uncertainty of Covid-19 has adversely affected our financial performance for 2020, we maintain a strong balance sheet that has been strategically built up over many years and this will ensure that we are able to cope with the unpredictability that may persist and, at the same time, continue to pursue growth.”

Also read our interview with Nick Kirrage and Simon Adler (IC, 02.07.21)