Genting SP and Genting Berhad

Genting Singapore (GENS SP) SELL

Price/Tgt: S$1.11/1.00 Mkt Cap: US$9.4b Daily: Vol 79.8m 1-Yr Hi/Lo: S$1.32/0.39
Receives casino licence; ready for opening anytime soon. Resorts World Sentosa (RWS) received its casino license from the Casino Regulatory Authority of Singapore (CRA) on 6 Feb 10 and is set to commence operations anytime soon.

Comment: The timing of the receipt of RWS' casino license is within our expectation, and we believe that RWS will officially open its casino just before Chinese New Year (CNY) to take advantage of the festive season. The event is expected to generate favorable market sentiment and may temporarily boost GENS' share price. However, we reckon any share price upside would be capped by concerns over the strict junket regulatory environment, and Genting Singapore's (GENS SP) lofty valuations relative to regional peers (average 2010 EV/EBITDA of 10.5x). Currently, GENS is trading at 17.1x 2010 and 13.6x of 2011 EV/EBITDA.