Company Name: GENTING SINGAPORE PLC
| Research House: Citigroup | Price Call: BUY | Target Price: 1.85 |
Genting Singapore’s 1Q13 results beat expectations solidly on a hold-adjusted basis, Citigroup says, adding normalizing for the low 2.12% VIP hold, adjusted EBITDA would have been around $400 million, 6% above its forecast. It notes reported adjusted EBITDA was $255 million, down 34% on-year. Because of the less-favorable VIP hold rate at GENS’ Resorts World Sentosa vs rival Marina Bay Sands’ 2.51%, RWS captured around 45% of total 1Q13 market share vs 4Q12’s 51%, it estimates.
“The two Singapore casinos delivered stronger-than-expected VIP rolling volume growth, but they were both dragged down by subpar VIP hold,” it says, adding “VIP recovery remains the key driver in the market, while mass gross gaming revenue will likely show little growth, reflecting subdued local demand.” Citigroup remains optimistic on the Singapore market’s growth and expects RWS to benefit from easy comparisons near-term.
It lowers GENS’ FY13 earnings forecast on 1Q13’s weak hold, but raises its 2014-15 earnings forecasts by 6%-7% on the better-than-expected VIP volume recovery. It keeps a Buy call and raises its target to $1.85 from $1.80. The stock is down 8.4% at $1.475.
No comments:
Post a Comment