The group announced that it has entered into a sale and purchase agreement for the disposal of its entire equity stake in its UK casino operations to Genting Worldwide (UK) Limited, a wholly owned subsidiary of its sister company Genting Malaysia, for a cash consideration of GBP340m, or SGD688.8m. Maintain BUY.
We view the disposal positively for Genting Singapore as
1) the transacted valuation at 11.2x FY11 EV/EBITDA is attractive compared with the peer valuation in UK for Rank Group PLC, which although being a larger company is trading at only 6.3x FY11 EV/EBITDA,
2) the UK casino assets are considered non-core as they contribute less than 5% of group earnings, whereby the EBITDA margin of 15% is significantly lower than Resorts World at Sentosa casino’s 30%,
3) the sales proceeds can be channeled into higher yielding future strategic growth opportunities, and
4) unlocking of resources that can be channeled into improving the operations of RWS
Marginal immediate term impact on core earnings. The group’s net debt to EBITDA is expected to decline to 0.8x from 1.4x upon completion of the disposal. Assuming that the entire proceeds were to yield an average return of 2% from a combination of fixed deposits and other money market instruments, we estimate the net impact on earnings post disposal of the UK operation at a marginal 2.6% decline as the ultra low returns of fixed deposits and money market instruments would be insufficient to fully offset the loss in earnings from the disposal. The disposal will, however, give rise to a one off non-recurring gain of SGD103.6m. Focus on larger scale future ventures. More importantly, the disposal of its UK operation signals management’s focus on leveraging on its expertise to develop future large scale integrated casino projects which provide more compelling growth for the group, in our view.
(Source: Company Flash by OSK Research Group)
Showing posts with label Super Stock : Genting SP. Show all posts
Showing posts with label Super Stock : Genting SP. Show all posts
Friday, July 2, 2010
Wednesday, June 30, 2010
Wednesday, June 23, 2010
Genting Berhad : Strong Growth on Revenue from GENTING Singapore (Holiday season)
A peek at RWS: Full house! Our attempt to visit Universal Studios was futile as tickets were sold out during weekends and on the day of our visit. Park capacity has increased to c8-10k guests (from 5k in May; full capacity: 30k) and operating hours extended to 7pm (from 6pm) in view of the school holidays. Hotels were seeing >80% occupancy, with weekends fully booked. While the casino was quiet during our visit on Monday morning, we understood that gaming operations have stabilized post-MBS opening and are seeing good visitations backed by strong loyalty from Genting Group’s Worldcard members. A total different picture was presented during our evening peak hour visit, with table crowds averaging 3 rows deep.
Positive stance on Singapore gaming. Even with MBS’ opening in Apr10, we believe GENS will likely report another strong quarter backed by healthy visitations during the peak holiday season (May-Jul10). While Genting Singapore offers the best leverage into Singapore’s duopolistic market, a cheaper entry will be via Genting Berhad (Buy/ TP: RM9.00) which is trading at half of GENS’ valuation at 7.4x 2011 EV/EBITDA, along with resilient base earnings from its other operations ie Malaysian gaming, plantation and power
Positive stance on Singapore gaming. Even with MBS’ opening in Apr10, we believe GENS will likely report another strong quarter backed by healthy visitations during the peak holiday season (May-Jul10). While Genting Singapore offers the best leverage into Singapore’s duopolistic market, a cheaper entry will be via Genting Berhad (Buy/ TP: RM9.00) which is trading at half of GENS’ valuation at 7.4x 2011 EV/EBITDA, along with resilient base earnings from its other operations ie Malaysian gaming, plantation and power
Thursday, June 17, 2010
Thursday, May 6, 2010
Tuesday, March 30, 2010
GENTING Singapore : Expect High Profit Margin on Coming Quarterly Result
I personally visited GENTING Singapore's casino and Universal Studio last week.
Universal Studio - Very crowded, 40% Local Singaporeans and 60% Foreign Visitors. Very long Q on waiting for each game.It will generate enough return for GENTING Singapore in coming quarter.
Casino - I saw many local Singaporeans, don't care bout entry levy, just pay S$100 to go to bet with Uncle Lim. There're many Chinese from China, holding Working Permit in Sg, actually go into casino after office/working hours. Weekend, JB Chinese, actually travel from JB to Sentosa Singapore. There're no reason for them to travel from JB to KL for gambling purpose. Singpaore is close to JB, Jakarta.
Hotel - 85-90% occupied.
After this visit, i'm very optimistic about Genting Singapore. But, next month, Las Vegas Sand will be opened in Marina Bay Singapore. Temporary short-sell in Genting Singapore (G13) share, is good opportunity to accumulate the share at lower valuation before next quarterly result announce.
Universal Studio - Very crowded, 40% Local Singaporeans and 60% Foreign Visitors. Very long Q on waiting for each game.It will generate enough return for GENTING Singapore in coming quarter.
Casino - I saw many local Singaporeans, don't care bout entry levy, just pay S$100 to go to bet with Uncle Lim. There're many Chinese from China, holding Working Permit in Sg, actually go into casino after office/working hours. Weekend, JB Chinese, actually travel from JB to Sentosa Singapore. There're no reason for them to travel from JB to KL for gambling purpose. Singpaore is close to JB, Jakarta.
Hotel - 85-90% occupied.
After this visit, i'm very optimistic about Genting Singapore. But, next month, Las Vegas Sand will be opened in Marina Bay Singapore. Temporary short-sell in Genting Singapore (G13) share, is good opportunity to accumulate the share at lower valuation before next quarterly result announce.
Saturday, March 20, 2010
Monday, February 22, 2010
Genting Singapore from JP Morgan Research
Rating : Overweight
Price : S$0.94
Target Price : S$1.20
FY09 results slightly below; Spore casino opening within expectations
1) Result slightly below expectations; we maintain OW: Genting Singapore reported an FY09 core net loss of S$167MM vs. our estimate of S$149MM. We are not changing our rating.
2) Weaker UK operations in 4Q09: UK operations contributed S$23MM in FY09 and S$33MM in 9m09. The weaker 4Q09 numbers are due to a poorer luck factor and weaker attendance.
3) RWS casino operations within expectations, so far: Visitor arrivals to the casino were 20,000-25,000 per day in the first five days of operation, which could equate to 7.3MM visitors per annum (by simply extrapolating 20,000 visitors per day); this is above our estimate of 5MM visitors to the casino in FY10. This is in spite of the milder marketing efforts given the initial uncertainty of the opening date. Note that the company is maintaining its visitor arrival forecast of 13MM visitors within the first year of opening.
4) Share price has been weak lately and may remain weak in the short term: This, we believe, is due to (1) recent mandatory conversion of S$322MM of CBs into 338MM new shares, and (2) some initial issues such as the long lines outside the casino and less experienced dealers.
5) Price target, valuation, key risks: We remain OW on the stock with a fundamental PT of S$1.20 as we believe in the long-term prospects of the two Singapore IRs, while we believe that there is upside potential to our FY10E numbers (judging by the very preliminary numbers above). We reiterate the benefit Genting should reap from having 100% market share in the casino segment for at least the next three to five months before the opening of the Sands casino.
Price : S$0.94
Target Price : S$1.20
FY09 results slightly below; Spore casino opening within expectations
1) Result slightly below expectations; we maintain OW: Genting Singapore reported an FY09 core net loss of S$167MM vs. our estimate of S$149MM. We are not changing our rating.
2) Weaker UK operations in 4Q09: UK operations contributed S$23MM in FY09 and S$33MM in 9m09. The weaker 4Q09 numbers are due to a poorer luck factor and weaker attendance.
3) RWS casino operations within expectations, so far: Visitor arrivals to the casino were 20,000-25,000 per day in the first five days of operation, which could equate to 7.3MM visitors per annum (by simply extrapolating 20,000 visitors per day); this is above our estimate of 5MM visitors to the casino in FY10. This is in spite of the milder marketing efforts given the initial uncertainty of the opening date. Note that the company is maintaining its visitor arrival forecast of 13MM visitors within the first year of opening.
4) Share price has been weak lately and may remain weak in the short term: This, we believe, is due to (1) recent mandatory conversion of S$322MM of CBs into 338MM new shares, and (2) some initial issues such as the long lines outside the casino and less experienced dealers.
5) Price target, valuation, key risks: We remain OW on the stock with a fundamental PT of S$1.20 as we believe in the long-term prospects of the two Singapore IRs, while we believe that there is upside potential to our FY10E numbers (judging by the very preliminary numbers above). We reiterate the benefit Genting should reap from having 100% market share in the casino segment for at least the next three to five months before the opening of the Sands casino.
Wednesday, January 6, 2010
Genting Singapore Plc (GENS SP)
Genting Singapore Plc (GENS SP), an operator of casinos in
London, said it will begin phased opening of Resorts World
Sentosa, its S$6.6 billion integrated casino resort project in
Singapore, on Jan. 20. Resorts World will begin taking room and
restaurant reservations for its four hotels from Jan. 11. The
casino will open once the company gets its licence, it said.
Genting lost 0.8 percent to S$1.28.
London, said it will begin phased opening of Resorts World
Sentosa, its S$6.6 billion integrated casino resort project in
Singapore, on Jan. 20. Resorts World will begin taking room and
restaurant reservations for its four hotels from Jan. 11. The
casino will open once the company gets its licence, it said.
Genting lost 0.8 percent to S$1.28.
Monday, December 21, 2009
GENTING SP
GENTING SP, ocbc maintain BUY with target price $1.31
-Early 1Q10 opening draws nearer. Genting Singapore (GS) is drawing nearer to its soft opening in Jan 2010 - we understand that this would involve the casino, four hotels (likely to be progressive) and Universal Studio Singapore (USS). We believe that the construction and fitting out is on track with many segments already done up - one such attraction would be its 1600-seat Festive Grand Theatre as Resorts World Sentosa (RWS) will host the children's charity concert ChildAid from 19-21 Dec 2009.
-USS ticket prices affordable. GS has also recently announced the pricing for USS, which will open with 20 of its 24 attractions ready to thrill visitors. A 1-day adult pass will cost S$66 during the weekdays and this goes up to S$72 during the weekends; a 1-day child (under 12) pass would cost S$48 and S$52, respectively. As compared to the other regional theme parks, we think that the basic pricing point should be pretty attractive enough to draw both local and foreigner visitors. For example, the Warner Bros Movie World in Australia and the Disney Land and Universal Studios in Japan would set an adult back S$90 per day; the USS 1-day adult ticket offers a discount of between 20.1% and 26.7%, depending on whether it is a weekday or weekend pass. Only the Disney Land in Hong Kong is cheaper but not by much - the USS 1-day pass is only 5.5% to 15.1% more expensive.
-Casino likely to see strong opening. As for its main casino business, if the recent robust casino revenues reported in Macau in 3Q09 and Oct 2009 are any indication, we expect the RWS casino to see a strong opening. Based on our industry checks, we believe that GS should have no problems attracting high rollers into its casino here, where it has a ready pool to tap on from the Genting group of companies. We also do not see a shortage of walk-in customers as RWS has already confirmed 30 events bookings.
-Maintain BUY with S$1.31 fair value. Although we are only expecting RWS to turn positive in 2011, a quicker than-expected turnaround is possible should visitation numbers turn out to be better-than-expected. As such, we maintain our BUY rating and S$1.31 fair value. Risks to our estimates include a deterioration of the global economic recovery as well as costoverruns for RWS' latter phases.
-Early 1Q10 opening draws nearer. Genting Singapore (GS) is drawing nearer to its soft opening in Jan 2010 - we understand that this would involve the casino, four hotels (likely to be progressive) and Universal Studio Singapore (USS). We believe that the construction and fitting out is on track with many segments already done up - one such attraction would be its 1600-seat Festive Grand Theatre as Resorts World Sentosa (RWS) will host the children's charity concert ChildAid from 19-21 Dec 2009.
-USS ticket prices affordable. GS has also recently announced the pricing for USS, which will open with 20 of its 24 attractions ready to thrill visitors. A 1-day adult pass will cost S$66 during the weekdays and this goes up to S$72 during the weekends; a 1-day child (under 12) pass would cost S$48 and S$52, respectively. As compared to the other regional theme parks, we think that the basic pricing point should be pretty attractive enough to draw both local and foreigner visitors. For example, the Warner Bros Movie World in Australia and the Disney Land and Universal Studios in Japan would set an adult back S$90 per day; the USS 1-day adult ticket offers a discount of between 20.1% and 26.7%, depending on whether it is a weekday or weekend pass. Only the Disney Land in Hong Kong is cheaper but not by much - the USS 1-day pass is only 5.5% to 15.1% more expensive.
-Casino likely to see strong opening. As for its main casino business, if the recent robust casino revenues reported in Macau in 3Q09 and Oct 2009 are any indication, we expect the RWS casino to see a strong opening. Based on our industry checks, we believe that GS should have no problems attracting high rollers into its casino here, where it has a ready pool to tap on from the Genting group of companies. We also do not see a shortage of walk-in customers as RWS has already confirmed 30 events bookings.
-Maintain BUY with S$1.31 fair value. Although we are only expecting RWS to turn positive in 2011, a quicker than-expected turnaround is possible should visitation numbers turn out to be better-than-expected. As such, we maintain our BUY rating and S$1.31 fair value. Risks to our estimates include a deterioration of the global economic recovery as well as costoverruns for RWS' latter phases.
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