Company Update

Keith Wee

+60 (3) 9207 7638

Keith.wee@osk.com.my Genting Singapore

Closer to Reality

BUY 

Target SGD1.13

Previous SGD1.22

Price SGD0.93

GAMING

Genting Singapore is primarily involved in

the development of integrated resorts, and

operation of casinos and other lesiure and

hospitality services

Stock Statistics

Bloomberg Ticker GENS SP

Share Capital (m) 12,161.0

Market Cap (S$m) 11,309.8

52 week H

3mth Avg Vol (‘000) 131,553.0

YTD Returns -28.5

Beta (x) 0.90│L Price (S$) 1.32 0.42

Major Shareholders (%)

Genting 53.8%

Share Performance (%)

Month Absolute Relative

1m -12.3 -16.0

3m -13.9 -17.1

6m -11.6 -17.6

12m 128.7 20.9

6-month Share Price Performance

0.80

0.90

1.00

1.10

1.20

1.30

Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10

To get a better feel of the casino visitation post it’s opening euphoria and the

vibrancy of its non-casino facilities before the opening of Universal Studios

Singapore (USS), we visited Resorts World at Sentosa last week. Response to our

organised tour was good, where 25 fund managers from both Malaysia and

Singapore joined in on the tour. Although the queue into the casino was shorter

compared to the first week of opening, the mass gaming floor areas was still

vibrant. However, looking at the lower than expected number of tables and slots in

operations and the lag in the ramping up of capacity, but partially offset with higher

yield per table we have reduced our FY10 and FY11 EBITDA by 6% and 3%

respectively. As a result we are lowering our TP from SGD1.22 to SGD 1.13. We

maintain our BUY recommendation and continue to like the RWS long term growth

prospects. The stock has suffered a significant retracement of more than 26% over

the last two months and valuations are now at a more reasonable 13.1x FY11

EV/EBITDA.

Smooth flow.

less than 35 minutes to reach the Festive Hotel at RWS from Changi airport, with a much

shortened journey of less than 20 minutes if one were to hop into a cab instead.Despite a relatively slow moving bus ride from the airport to RWS, it took us

Strategically located to tap foreign arrivals.

its ability to package unique theme oriented Meetings, Events and Conferences with

Universal Studios will be a key long term positive in driving foreign visitation and tourism

arrivals into RWS, in our view. Case in point, we noticed a number of international airlines

staff checking in and out of the Festive hotel during our two day one night stay, while

management has indicated that the pipeline for meetings, events and conference at its

property has been well received. One senior hotel staff told us that most of the hotel

guests were Indonesians, Malaysians and Mainland Chinese.The close proximity to Changi airport and

Tour begins.

Rock Hotel where we happened to sit next to a group of popular Singaporean TV

celebrities, we then proceeded with the tour which was led by the head of strategy of RWS

and special adviser to the Chairman of Genting Singapore. The guided tour encompasses

the three hotels (Hard Rock hotel, Festive hotel and Hotel Michael), Resorts World

Conference centre, Universal Studios Singapore and the casino.Upon finishing our lunch at one of the more popular restaurant at the Hard