Company Name: GENTING SINGAPORE PLC
| Research House: Deutsche Bank | Price Call: HOLD | Target Price: 1.21 |
Deutsche Bank expects Genting Singapore’s Resorts World Sentosa to show a similar weak trend as rival Las Vegas Sands’ Marina Bay Sands property. MBS was hit by a “triple whammy” of lower volume, lower hold and higher provisions, showing mass-gaming market decline for the first time, it notes.
The house expects GENS’ 3Q12 results, due Nov. 12, to show flat revenue with lower ebitda on-quarter, with VIP rolling volume flat on-quarter, but down 17% on-year, while mass revenue is likely to be marginally higher on-quarter, with RWS likely gaining slots market share. It forecasts 3Q12 ebitda of $280 million-$290 million and $700 million revenue.
“Singapore gaming market may have contracted by roughly 20% year-on-year (VIP down 37%; mass down 2%) or 6% quarter-on-quarter to about $1.6 billion from $1.72 billion in 2Q12).” Market-share by gross-gaming revenue may have shifted toward RWS, given MBS’ poor VIP hold, but overall hold-adjusted market share likely didn’t shift significantly on-quarter, the house says, noting MBS was at 53%, with RWS at 47%. It rates GENS Hold with $1.21 target. The stock is down 1.5% at $1.33.
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