Maintain BUY with lower TP of SGD1.13. We have lowered our target price in tandem with our 3% to 6% cut in EBITDA estimates from lower visitation assumptions and lag in ramping up of table capacity. The share price has retraced by more than 26% over the past two months. Although the current valuation at 13.1x FY11 EV/EBITDA is still relatively expensive vs the regional peer average of 8x to 14x, RWS is a strong long-term growth proposition and a share price de-rating to below 80 cents will be a strong BUY (11x FY11 EV/EBITDA). The group’s balance sheet is one of the strongest among gaming companies after Genting Malaysia. We think the market may need 3-6 months to digest the company’s operating and financial performance before drawing a clearer picture of its earnings visibility and what are deemed sustainable trends, thus providing more opportunities to accumulate on weakness.
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