RWS could beat consensus forecasts in its maiden year of operation in 2010, and boost GENS' earnings by 210.0% and 50.3% in 2010-11. Recommend HOLD due to limited upside to fair price of S$0.95.
We initiate coverage on Genting Singapore (GENS) with a HOLD call and a DCF-based fair price of S$0.95/share, which implies a target 2011 EV/EBITDA of 12.7x. While we believe Resorts World@Singapore (RWS) could trounce consensus forecasts in its maiden year as a casino operator in Singapore in 2010, a peakish market outlook could prompt investors to cash in following GENS' 98.9% ytd price appreciation. We expect GENS to trade in the S$0.90-0.95 range, with the top end having already factored in continuity of the Singapore casino licence and scarcity premium for comparable Asian gaming-consumer plays. As our fair price has limited upside potential, we recommend HOLD with an entry price of S$0.80.
Earnings on a roll. We project GENS' earnings to surge 210.0% and 50.3% to S$295.2m and S$443.8m in 2010-11 as RWS' casino operations go into full swing by 1Q10, ahead of rival Singapore casino operator Marina Bay Sands. GEN could beat consensus forecasts of S$105.3m given its first-mover advantage, and with the partial deferment of expansion of the less profitable non-gaming operations.
Leveraging on Asia's sizeable VIP and Singapore's domestic gaming markets. RWS should be able to capture 5.0% of Asia's VIP market (estimated at US$9b-10b p.a.) and 12.5% of Singapore's gaming market (estimated at S$9b-10b p.a.). This excludes the full grind market potential which RWS could tap from neighbouring countries such as Malaysia, Indonesia, and possibly even China. This is based on the premise of RWS' strong global network, favourable tax structure and strategic location in Asia.
Quick wins and high margins at RWS. The S$5.6b RWS project promises a good payback period of 8-9 years, riding on Singapore's favourable gaming tax structure which gives RWS an advantage over its competitors in Australia and Macau in the high roller segment. Meanwhile, the non-gaming division (principally Universal Studios) should eventually attain decent returns, judging from Universal Studios Japan's achievements in recent years.
UK business' run of bad luck should turn by 2011. GENS' UK business is projected to recover only in 2011 due to the UK's prolonged economic slowdown and adverse regulatory environment. Still, earnings could post apositive surprise as 2008's streamlining and restructuring exercises could save up to £10m annually, but the upside is not significant to group earnings.
Impacts on Genting. We expect Genting's earnings growth to gain momentum in 2010 and 2011, boosted by RWS' contributions. We forecast Genting's 2010 and 2011 EBIT growth at 80% and 17% yoy, mainly as RWS' contribution to group EBIT rises to 32.9% and 37.5% respectively (reversing losses in 2009). We recommend buying into share price weakness (with target price of RM7.60) as Genting will be the cheaper entry point to RWS' future earning growth potential.
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22521-22540 of 23260
People buy on false hope and sentiments. The upside is quite limited. Over time, good sense will prevail. Buy into profitable stocks with growth potentials : Boustead, Hiap Seng, Ezion, Midas, Ezra , Rotary (these are sure winners in the long run - just lock them up and watch them grow)
jing77 ( Date: 25-Aug-2009 15:56) Posted:
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can someone enlighten me who is buying genting at such a high price? the vol is so huge..
Why sell genting ?
Hulumas ( Date: 25-Aug-2009 15:45) Posted:
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Okay, I 'll start selling this counter tomorrow, any comment?
tonylim ( Date: 25-Aug-2009 15:43) Posted:
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It will be wise to switch to counters such as Hiap Seng, Midas and Rotary ! These are profitable companies with excellent growth potentials.
jing77 ( Date: 25-Aug-2009 15:12) Posted:
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actually i dont think it is "irrational". cos everyone knows it is very high le.. no doubt about it.. they vested to make more gains. people think that as long as they are not the last one out of the bubble den it is alright..
ozone2002 ( Date: 25-Aug-2009 15:10) Posted:
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i would use the wise words "Irrational Exuberence!"
So sorry if I offended those vested for being a party-pooper, but I just want to blow the whistle and sound a warning, better be safe than sorry and not be the last to leave the party and got burnt (reminds me of tat incidence of the party-goers playing sparklers till got so carried away and throw caution to the wind)
richtan ( Date: 25-Aug-2009 15:00) Posted:
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Not only creepy feel but also goose-pimples.
jing77 ( Date: 25-Aug-2009 14:46) Posted:
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Wah! tug of war going on at 0.98
jing77 ( Date: 25-Aug-2009 14:46) Posted:
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on the warpath to $1
cheers!
Whaooooo.... 1000 lots buy up at 0.98. At the rate it is going, might even touch $1 today. Hahahaha .
is genting rising a little too quickly? gives me the creepy feel
Those who think like this will never have bought at all...
Because at the .70, .80, and .90 levels before now, many were holding exactly this kind of thinking...
And that's why they have not bought ...
Then, irony of ironies... these are the ones who will at last start to buy at the top! ... hehehe... 
richtan ( Date: 25-Aug-2009 12:06) Posted:
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Huat ah
risktaker ( Date: 24-Aug-2009 22:21) Posted:
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Just be very careful, dun be the last one to carry someone's unwanted baby or "hot potatoes" when the musical chairs stopped, when Cinderella's ballroom clock strikes 12 (clock with no hands), remember the "Greater Fool Theory", better be safe than sorry.
Dyodd n BOSAYOR
iPunter ( Date: 25-Aug-2009 12:01) Posted:
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Should surpass $1.00 within this week...
Then someone may do a "Lim' at that level... hehehe...
96c now.....
Monday, August 24, 2009
erictkw ( Date: 25-Aug-2009 11:25) Posted:
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Monday, August 24, 2009
Genting Singapore - Even odds
RWS could beat consensus forecasts in its maiden year of operation in 2010, and boost GENS' earnings by 210.0% and 50.3% in 2010-11. Recommend HOLD due to limited upside to fair price of S$0.95.
We initiate coverage on Genting Singapore (GENS) with a HOLD call and a DCF-based fair price of S$0.95/share, which implies a target 2011 EV/EBITDA of 12.7x. While we believe Resorts World@Singapore (RWS) could trounce consensus forecasts in its maiden year as a casino operator in Singapore in 2010, a peakish market outlook could prompt investors to cash in following GENS' 98.9% ytd price appreciation. We expect GENS to trade in the S$0.90-0.95 range, with the top end having already factored in continuity of the Singapore casino licence and scarcity premium for comparable Asian gaming-consumer plays. As our fair price has limited upside potential, we recommend HOLD with an entry price of S$0.80.
Earnings on a roll. We project GENS' earnings to surge 210.0% and 50.3% to S$295.2m and S$443.8m in 2010-11 as RWS' casino operations go into full swing by 1Q10, ahead of rival Singapore casino operator Marina Bay Sands. GEN could beat consensus forecasts of S$105.3m given its first-mover advantage, and with the partial deferment of expansion of the less profitable non-gaming operations.
Leveraging on Asia's sizeable VIP and Singapore's domestic gaming markets. RWS should be able to capture 5.0% of Asia's VIP market (estimated at US$9b-10b p.a.) and 12.5% of Singapore's gaming market (estimated at S$9b-10b p.a.). This excludes the full grind market potential which RWS could tap from neighbouring countries such as Malaysia, Indonesia, and possibly even China. This is based on the premise of RWS' strong global network, favourable tax structure and strategic location in Asia.
Quick wins and high margins at RWS. The S$5.6b RWS project promises a good payback period of 8-9 years, riding on Singapore's favourable gaming tax structure which gives RWS an advantage over its competitors in Australia and Macau in the high roller segment. Meanwhile, the non-gaming division (principally Universal Studios) should eventually attain decent returns, judging from Universal Studios Japan's achievements in recent years.
UK business' run of bad luck should turn by 2011. GENS' UK business is projected to recover only in 2011 due to the UK's prolonged economic slowdown and adverse regulatory environment. Still, earnings could post apositive surprise as 2008's streamlining and restructuring exercises could save up to £10m annually, but the upside is not significant to group earnings.
Impacts on Genting. We expect Genting's earnings growth to gain momentum in 2010 and 2011, boosted by RWS' contributions. We forecast Genting's 2010 and 2011 EBIT growth at 80% and 17% yoy, mainly as RWS' contribution to group EBIT rises to 32.9% and 37.5% respectively (reversing losses in 2009). We recommend buying into share price weakness (with target price of RM7.60) as Genting will be the cheaper entry point to RWS' future earning growth potential.
We initiate coverage on Genting Singapore (GENS) with a HOLD call and a DCF-based fair price of S$0.95/share, which implies a target 2011 EV/EBITDA of 12.7x. While we believe Resorts World@Singapore (RWS) could trounce consensus forecasts in its maiden year as a casino operator in Singapore in 2010, a peakish market outlook could prompt investors to cash in following GENS' 98.9% ytd price appreciation. We expect GENS to trade in the S$0.90-0.95 range, with the top end having already factored in continuity of the Singapore casino licence and scarcity premium for comparable Asian gaming-consumer plays. As our fair price has limited upside potential, we recommend HOLD with an entry price of S$0.80.
Earnings on a roll. We project GENS' earnings to surge 210.0% and 50.3% to S$295.2m and S$443.8m in 2010-11 as RWS' casino operations go into full swing by 1Q10, ahead of rival Singapore casino operator Marina Bay Sands. GEN could beat consensus forecasts of S$105.3m given its first-mover advantage, and with the partial deferment of expansion of the less profitable non-gaming operations.
Leveraging on Asia's sizeable VIP and Singapore's domestic gaming markets. RWS should be able to capture 5.0% of Asia's VIP market (estimated at US$9b-10b p.a.) and 12.5% of Singapore's gaming market (estimated at S$9b-10b p.a.). This excludes the full grind market potential which RWS could tap from neighbouring countries such as Malaysia, Indonesia, and possibly even China. This is based on the premise of RWS' strong global network, favourable tax structure and strategic location in Asia.
Quick wins and high margins at RWS. The S$5.6b RWS project promises a good payback period of 8-9 years, riding on Singapore's favourable gaming tax structure which gives RWS an advantage over its competitors in Australia and Macau in the high roller segment. Meanwhile, the non-gaming division (principally Universal Studios) should eventually attain decent returns, judging from Universal Studios Japan's achievements in recent years.
UK business' run of bad luck should turn by 2011. GENS' UK business is projected to recover only in 2011 due to the UK's prolonged economic slowdown and adverse regulatory environment. Still, earnings could post apositive surprise as 2008's streamlining and restructuring exercises could save up to £10m annually, but the upside is not significant to group earnings.
Impacts on Genting. We expect Genting's earnings growth to gain momentum in 2010 and 2011, boosted by RWS' contributions. We forecast Genting's 2010 and 2011 EBIT growth at 80% and 17% yoy, mainly as RWS' contribution to group EBIT rises to 32.9% and 37.5% respectively (reversing losses in 2009). We recommend buying into share price weakness (with target price of RM7.60) as Genting will be the cheaper entry point to RWS' future earning growth potential.