Genting Singapore Plc : Project Debt Refinancing

Refinancing project debt.

Genting Singapore has recently signed a commitment letter to refinance S$4.1925bn of RWS project debt facilities obtained in 2008. The proposed refinancing is for the exact similar amount, comprising of S$3.5bn of term loans, S$0.5bn in revolving credit facilities and S$192.5m banker's guarantee facility. Tenure of the term loan remains 7-year, i.e.,from 2011-2018 (previously 2008-2015).

The refinancing exercise aimed to achieve the followings:-

(1) Lower funding cost to Singapore Dollar Swap Offer Rate (SOR) + 1.2% to 1.6% (depending on the debt/EBITDA ratio) from SOR +1.75% currently. However, given existing interest rate swap arrangement, RWS effective funding cost for its loan averages at about 4.75%. There will be an associated cost to unwind the SWAP and any interest savings is only expected to kick in from FY12 onwards. Assuming effective funding cost of 2.4%, the refinancing savings could enhance FY12E PBT projection by 3.7%.

(2) Remove/ease stringent project debt restrictions imposed on RWS

(3) To stretch out last repayment in 2015 to progressive payment over 2015-2018. The progressive repayment for 2011 to 2014 remains the same. The exact repayment structure was not disclosed.

Given that near term debt repayment structure remains the same and with Genting Singapore eyeing for Integrated Resort investment opportunity in Japan, we do not think the above refinancing would significantly change the company's dividend policy. Maintain buy and TP of S$2.60 on 14x 2011 EV/EBITDA. Key risks: prolong delay in junket licensing, regulatory changes and lower than expected gaming market share.

(Source : DB Research)

Singapore gaming : MBS aggressive ramping up

According to its parent's 3Q results, Marina Bay Sands (MBS) Singapore saw aggressive operations ramp, with gross gaming revenue rose 58% QoQ to S$7.8m. We estimate that Singapore gaming market may have grown 11-12% QoQ to S$17.5m a day based on our S$9.7m/day est at Resorts World Sentosa (RWS). Annualised, this suggests Singapore gaming market size of S$6.4bn. In terms of market share, we believe MBS has gained share to roughly 45% vs 31% in 2Q. More importantly, management indicated strong gaming revenue growth in October to S$10.9m/day (up 40% from 3Q) partly due to Golden Week holiday and heavy VIP hold. We maintain our view that Singapore could end the year at S$7.0bn annualized, with upside risk. Genting Singapore will report on 11 November. For 3Q, we expect RWS to report EBITDA of S$380m vs S$503m in 2Q due largely to low VIP hold. DB forecasts 3Q RWS EBITDA of 50.8%. Beyond the weak 3Q, we remain positive on the longer term outlook of Singapore market and maintain our forecasts of US$6.0n market in 2011. Our TP of S$2.60 TP values Singapore gaming at 14x 2011 EV/EBITDA. Key risks: prolong delays in junket licensing, regulatory changes and lower-than-expected market share.

Key statistics at MBS. MBS reported US$414.5m of net casino revenue or c. US$549m of gross gaming revenue in 3Q. This implies gross daily gaming revenue of US$6.0m or S$7.8m, up 58% QoQ (or S$8.0m on normalized hold of 2.85%, up 45% QoQ). Gross gaming revenue breakdown - 50% VIP; 36% mass and 14% slots. Growth were underpinned primarily by higher VIP rolling which rose 89% QoQ, averaging at US$113m a day vs US$60m in 2Q. VIP rolling grew further to US$168.3m in October (+50% vs 3Q). Property EBITDA margin stood at 49.7% in 3Q (or 51% on normalized hold).

Genting Singapore : Price Catalyst

Share Price Catalyst


• Sustained earnings.
• M&A – The company has at least S$1.5b reserved for acquisition(s).
• On the negative side, any evidence of slowing gaming revenue momentum could cause significant pullback

Genting Singapore (GENS SP) SELL

Genting Singapore (GENS SP) SELL Price/Fair: S$0.99/1.00 Mkt Cap: US$8.6b Daily: Vol 84.2m 1-Yr Hi/Lo: S$1.30/0.40

Genting Singapore - Too early to gauge
Analyst: Singapore Research Team Email: research@uobkayhian.com

Channel checks by our Singapore analyst on Resort World Sentosa's opening day verified that while the crowds were impressive, admissions to the casino were mainly foreigners, while locals appeared deterred by the entry levy. Despite the turnout, traffic flow to the resort was smooth and streamlined properly, a pleasant surprise considering that there is only one road linking the mainland to the island.

Casino admissions were severely limited by the casino's phased opening - only a fraction of the tables and slots were operational, resulting in a 30-45 minute waiting time for entry. We counted less than 100 slots and around 100 tables that were operational (capacity: 1,300 slots and over 600 tables) on the first day of operations. We understand that additional tables and slot machines were opened on day 2 owing to the high demand.

We estimate the average bet size to be about S$100 at non-roulette grind tables (typical minimum bets were S$25), somewhat comparable to the betting behaviour at Genting Highlands. We understand that a key reason behind the modest opening could be due to the Casino Regulatory Authority's strict micro-managing of the approval process (which in part involves certifying staff and approving appropriateness of slot machines).

We have a Sell call on Genting Singapore, with a S$1.00 fair price. Although the share price has fallen below S$1.00 now, we think it is too early to accumulate.

GENTING SP (G13) - Well positioned to tap pent-up regional demand

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GENTING SP : Casino Entry Fee $100 for Singaporean

According to some research from Brokerage House, S$100 entry fee for local Singaporeans.

Is S$100 really a big amount for Singaporean?
- Everyday, a lot "customer"s are Q-ing outside Singapore Pools(www.singaporepools.com.sg) to buy TOTO/Lucky Draw/4D. Business is extremely good.
- If want to go to legal Casino, they have to travel to Malaysia KL Genting, it takes 4 hours journey. Bus ticket cost them S$70 (two-way). Taxi, Accommodation, Food, How much?


GENTING MALAYSIA
Let's make some calculation for 2-days in Msia-Genting :-
1) Food - S$20
2) Accomodation - S$40
3) Bus ticket (two way) - S$70.00
4) Total Travel Period - 8 hours - For gambler, 8 hours will allow them to play many rounds.
Total Expense - S$130.00

GENTING SENTOSA
How about GENTING SENTOSA TRIP for Singaporean?
1) Entry fee - S$100.
2) SMRT-MRT- S$5

Total Expense - S$105.00

Conclusion:-
They can save up to S$25 and save travel times. Time is $$$ for Serious Gambler. They can earn back 105 within 1minute. :)


Another Points :-
I guess A lot of malaysians from Johor Bharu(Malaysia) will travel to visit GENTING SENTOSA and have some "BET". Why not spend long journey from JB -> KL -> GENTING HIGHLAND. Don't waste $$ & Time lar !!!

GENTING Singapore Plc : Swinging open its doors in Jan 2010 : TP 1.27

Maintain Trading Buy. Quoting Genting Group’s chairman Tan Sri Lim Kok Thay, Bloomberg reported that Resorts World at Sentosa (RWS) is on track to open in early Jan 2010. While not entirely a surprise, the early opening will be a positive, in our view, as: 1) it falls within the earlier part of its 1Q2010 guidance; and
2) RWS can fully capture holiday-makers during next year’s Chinese New Year festivities. Also, RWS’s debut is very likely to be ahead of its rival’s, Marina Bay Sands (MBS). We continue to anticipate growing excitement over RWS as we approach its opening date. We retain our FY09-11 earnings estimates and end-CY10 sum-of-the-parts target price of S$1.27. Reiterate TRADING BUY with share-price catalysts likely to come from:
1) this concrete opening date;
2) more aggressive marketing efforts;
3) the award of its casino licence; and
4) a potentially longer-than-expected monopoly period if MBS opens later.

Reason:
Positive development. The early Jan 2010 opening date is not entirely a surprise. GS has always guided for a RWS debut in 1Q2010. The timing excites us more as: 1) it falls within the earlier part of its 1Q2010 guidance; and 2) RWS would be able to capture the Chinese New Year crowd, as the Lunar New Year falls on 14 Feb next year. More importantly, an early Jan 2010 debut is very likely to be ahead of MBS’s expected Jan or Feb 2010 opening date. We note that RWS’s first event would be a ChildAid Concert, to take place on Dec 19-21 at its Festive Grand Theatre. Although RWS clarified earlier on that the theatre would be the only property accessible then, we do not discount the possibility of a soft opening of the resort to selected guests in conjunction with the concert.

Expecting more news flow. Besides this opening date, we expect RWS to step up its marketing efforts in the coming weeks as it seeks to build up excitement ahead of its opening. Another key event to watch for is the award of its casino licence, expected before year-end.

Still positive on RWS’s prospects. We remain optimistic on RWS’s prospects, especially with a more concrete opening date. Furthermore, RWS’s competitor appears still quite a distance form the finishing line. A potentially longer-than-expected monopoly period would be positive for RWS and could boost its numbers beyond our earlier estimates, especially with growing anticipation for the debut of Singapore’s two integrated resorts.

Valuation & Recommendation
Still a TRADING BUY. No change to our FY09-11 earnings estimates. Growing excitement over RWS as we approach its opening date and newsflow on RWS’s intensified marketing and rollout efforts, together with the award of a casino licence sometime in 4Q09 are expected to provide stock catalysts. GS remains a TRADING BUY.