The Motley Fool

3 Potential Winners from The Singapore IR Expansion Plans

Singapore’s integrated resorts (IR) have announced plans to invest a total of S$9 billion to expand their current operations and some companies may benefit more than others.

Details are still emerging but the committed investments will include a 1,000 room all-suite tower at Marina Bay Sands (MBS), 15,000 seat arena, as well as extensions to Universal Studios Singapore, which is part of the Resorts World Sentosa (RWS) facility owned by Genting Singapore (SGX: G13).

Each IR will invest S$4.5 billion, and MBS plans to build a fourth tower next to its existing three. It will be topped by a sky roof and will fill the gap between the Singapore Indoor Stadium and the National Stadium. The building will also have 30% to 40% more space for MICE (Meetings, Incentives, Conventions and Exhibitions). New experiences will open each year starting from 2020, with full completion anticipated in 2025.

The huge investments are expected to create 5,000 direct jobs. At the same time, the new attractions are projected to draw 500,000 more tourists to Singapore every year.

With that in mind, here are three companies which we think will benefit from these exciting plans.

Straco Corporation (SGX: S85)

Straco Corporation is an operator of tourism attractions with two aquariums in China – Shanghai Ocean Aquarium and Underwater World Xiamen, as well as 90% of the iconic Singapore Flyer. With the expected increase in the number of visitors coming to Singapore, Straco’s Flyer could stand to benefit from increased visits and ridership.

The construction of the fourth tower by MBS is slated to make the Marina Bay area even more vibrant and would increase the attractiveness of the area for tourists. With more hotel rooms available in future, there would also be more chances of these visitors popping by surrounding attractions (which includes the Singapore Flyer) in the area.

SATS (SGX: S58)

SATS (Singapore Airport Terminal Services) is a company which provides food catering solutions for airlines and industrial clients, as well as gateway solutions (ground handling services for passengers, flights and cargo) at airports. The company is a direct proxy for air travel as it directly benefits from an increased number of flights and visitors coming to Singapore.

With the projected number of tourists increasing over the years, along with the plans to revamp Changi Airport Terminal 2 (completion slated for 2024) and construction of a new Terminal 5, SATS’ business stands to benefit as they are caterers for major airlines flying in and out of Singapore. Increased volumes of tourists would mean better prospects for the company as they are also recently unveiled a new S$25 million kitchen with enhanced food technologies.

Kingsmen Creatives (SGX: 5MZ)

Kingsmen is a leading communication design and production group that was established in 1976. The company serves global clients in the fit-out of retail interiors and also deals with theme parks, exhibitions and events in the MICE space. The company has also performed work on theme parks such as Universal Studios Singapore (USS) and Disneyland Shanghai in recent years.

The announcement of the revamp of USS and the introduction of two new attractions, Minion Park and Super Nintendo Park, provides Kingsmen’s theme parks division with good potential future business. MBS’ fourth tower would have additional space for MICE events and increase the current MICE event space by 30% to 40%, thereby providing a boost to Kingsmen’s exhibitions and events segment’s prospects.

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The Motley Fool Singapore contributor Royston Yang contributed to this article. Royston owns shares in Kingsmen Creatives, Straco and SATS.

The information provided is for general information purposes only and is not intended to be personalized investment or financial advice. The Motley Fool Singapore has recommendations for SATS and Straco. The Motley Fool Singapore writer Chin Hui Leong owns shares in SATS.