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.