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Third Ave International Real Estate has recently initiated a position in Genting Spore. If I look back at Genting Spore's share price performance, it topped out in 2010-2011, just around the time when RWS, its flagship resort opened to public. Based on its last 10years' share price chart, Genting Spore has underperformed the STI index by ~60%, despite been a great FCF producer. Was expectations and/or visibility too high in 2010-2011? Or did it underperform wrt to expectations? History doesn't repeat but it certainly rhymes. 
This company has a lot cash, duopoly and a very addictive business model. Maybe this explains why its peer Sands is trading at 13x EBITDA. Then why is Genting Spore trading at only half of Sands' valuations?
INTERNATIONAL REAL ESTATE VALUE FUND
With this in mind, the Fund initiated an investment position in Genting Singapore (“Genting”), the owner and operator of Resort World Sentosa, an integrated resort opened in 2010. This property comprises over 120 acres of land and offers 1,600 hotel rooms, a 160k square foot casino, and several family friendly theme parks such as Universal Studios and aquariums. The casino is one of only two currently allowed in Singapore, with exclusive rights at a minimum through 2030.
Fund Management has followed Genting closely for several years, with Third Avenue’s Value Fund holding a position since 2021. There are several positive considerations, including (i) Genting’s balance sheet has no debt and significant cash (35% of market cap), (ii) ample land means Genting Singapore can expand the resort and has plans for a significant 700-room luxury hotel and other attractions, (iii) in Fund Management’s opinion the casino ‘duopoly’ will likely last well beyond 2030, (iv) tourism arrivals are not yet back at peak pre COVID levels and should continue to improve over the next few years, and (v) Resorts World Sentosa is not solely reliant on the Chinese consumer as resort benefits from Singapore’s high tourist arrivals from Indonesia, India, and Malaysia in addition to Singaporean locals.
Regarding valuation, Genting’s shares seem mispriced in an absolute and relative sense, trading at attractive multiples and a meaningful discount to our estimate of net asset value and the historical cost of developing the resort. Notably, Genting’s most similar peer is U.S.-listed Las Vegas Sands (“Sands”), which has exposure to five casinos in Macau and controls the other Singaporean integrated resort, Marina Bay Sands. Despite many similarities, Sands trades at about 13x trailing earnings before interest, taxes, depreciation, amortization5, whereas Genting trades at only 6x.
International Real Estate Value Fund Q324
https://www.thirdave.com/reifx-shareholder-letter
This company has a lot cash, duopoly and a very addictive business model. Maybe this explains why its peer Sands is trading at 13x EBITDA. Then why is Genting Spore trading at only half of Sands' valuations?
INTERNATIONAL REAL ESTATE VALUE FUND
With this in mind, the Fund initiated an investment position in Genting Singapore (“Genting”), the owner and operator of Resort World Sentosa, an integrated resort opened in 2010. This property comprises over 120 acres of land and offers 1,600 hotel rooms, a 160k square foot casino, and several family friendly theme parks such as Universal Studios and aquariums. The casino is one of only two currently allowed in Singapore, with exclusive rights at a minimum through 2030.
Fund Management has followed Genting closely for several years, with Third Avenue’s Value Fund holding a position since 2021. There are several positive considerations, including (i) Genting’s balance sheet has no debt and significant cash (35% of market cap), (ii) ample land means Genting Singapore can expand the resort and has plans for a significant 700-room luxury hotel and other attractions, (iii) in Fund Management’s opinion the casino ‘duopoly’ will likely last well beyond 2030, (iv) tourism arrivals are not yet back at peak pre COVID levels and should continue to improve over the next few years, and (v) Resorts World Sentosa is not solely reliant on the Chinese consumer as resort benefits from Singapore’s high tourist arrivals from Indonesia, India, and Malaysia in addition to Singaporean locals.
Regarding valuation, Genting’s shares seem mispriced in an absolute and relative sense, trading at attractive multiples and a meaningful discount to our estimate of net asset value and the historical cost of developing the resort. Notably, Genting’s most similar peer is U.S.-listed Las Vegas Sands (“Sands”), which has exposure to five casinos in Macau and controls the other Singaporean integrated resort, Marina Bay Sands. Despite many similarities, Sands trades at about 13x trailing earnings before interest, taxes, depreciation, amortization5, whereas Genting trades at only 6x.
International Real Estate Value Fund Q324
https://www.thirdave.com/reifx-shareholder-letter
I am not a certified financial advisor and so nothing of what I say should be construed as financial advice. Please consult a certified financial advisor for advice instead.