Genting Singapore Plc - 1Q11 results - Dealing the good luck cards

1Q11 core net profit, at 29% of our full-year forecast and 26% of consensus, is above

expectations. The main discrepancy was stronger-than-expected gaming revenue

from the VIP segment, which significantly bumped up EBITDA margins. Although

1Q11 VIP revenue was driven by above-theoretical win rates, we were previously too

conservative in our topline estimates. Factoring in higher revenue assumptions, we

raise our FY11-13 earnings estimates by 8-26%. Our earnings upgrade nudges up our

end-CY11 SOP-based target price from S$2.70 to S$2.79,

with an unchanged CY12 EV/EBITDA of 16x for its gaming operations. We see re-rating catalysts from: 1)sustained market leadership

S$537.9m, with margin of 59%.Genting Singapore (GS) made a good start to 2011.

Robust operating statistics.

operates some 589 tables, with 30% set aside for VIP. It also has about

2000 slot machines, with 360 being ETG (electronic table gaming) machines.

GS adds that it has about 10% of available gaming space left for expansion.

GS has also achieved a superior hold rate of 3.8% for its VIP segment,

recovering very nicely from the first quarter when the hold was at the lower

end of the theoretical 2.8-3.0% range. For the non-casino business, RWS

saw significant contribution from USS and the hotels. According to

management, USS received an average of 7.4k daily visitors in 1Q11, though

down slightly from the 8.3k in 4Q10 (school holiday period), but average

spend was higher at S$88 each versus S$85 in the previous quarter. On

the hotel side, occupancy rate has maintained at 79%, unchanged from

the previous quarter, although the average room rate dipped to S$280 from

S$294.For its gaming business, GS revealed that it

Outlook remains fairly upbeat

continue to do well in the Year of the Rabbit, with strong visitorship in both

VIP and mass segments it also reveals that it will continue to focus on the

overseas premium segment and will not pursue the local mass market.

RWS (Resorts World Sentosa) will steadily add attractions such as the

Maritime Xperiential Museum, Marine Life Park and destination spa by

2012 to reinforce its standing as the IR of choice to all visitors to Asia

although it notes that the completion of the second phase may experience

a slight delay of several months, and has allocated additional resources to

address the issue.. Going forward, GS believes that it will

Maintain BUY.

full-year revenue and core earnings estimates respectively, we do not see

the need to make any adjustments at this stage. As such, our DCF-based

fair value also remains at $2.53. Maintain

http://www.remisiers.org/cms_images/research/May09-May13/Market_Pulse-110513-OIR.pdf

With 1Q11 results meeting some 19.5% and 23.2% of ourBUY. (Carey Wong)