UBS raises Genting Singapore (G13.SG) target price to $1.52 from $1.23 after increasing 2011 EBITDA estimate by 18% to S$1.2 billion to assume higher margins. Keeps Buy call, says Dow Jones.
UBS days rival Las Vegas Sands’ (LVS) 2Q10 EBITDA margin of 44% confirms “the exceptionally high level of profitability that can be achieved at the Singapore integrated resorts”.
Singapore stocks off to shaky start as sentiment cautious after Wall Street’s retreat, although some pockets of strength evident, says Dow Jones.
STI +0.1% at 2,989.79 after opening tad lower; immediate resistance at 3,000, with support at 2,950.
Key gainers among STI components include Genting Singapore (G13.SG), +2.4% at $1.29 on strong volume, as rival Las Vegas Sands’ (LVS) return to profitability in 2Q10 spurs hopes for robust earnings from Genting next month.
Among non-STI stocks, new listing Kreuz Holdings (5RK.SG) in demand, last at $0.33 vs $0.27 IPO price in active trade. Market breadth slightly positive.
“There’s not much going on to drive the market but some stocks with a positive news angle are doing well,” says dealer at local brokerage,
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Genting Singapore (G13.SG) off 0.8% at $1.25, pausing for breather after run-up in early trade to six-month high of $1.27, according to Dow Jones.
Shares up for last 4 sessions, +7.7% since beginning July, on broad market gains, optimism over recent move to sell money-losing UK operations to focus on Resorts World Sentosa.
Shares of casino operator Genting Singapore (GENS.SI) rose as much as 2.5% to a six-month high of $1.24 today after Goldman Sachs raised its rating on the firm to “neutral” from “sell”.
Over 79.6 million shares had changed hands by 11:13 a.m.
CLSA lifts Genting Singapore (G13.SG) target price to $1.30 from $1.20, based on 13x EV/EBITDA, according to Dow Jones.
Expects FY11 EBITDA growth of 39%, underpinned by robust tourist arrivals to Singapore.
Still, downgrades to Outperform from Buy on limited upside to new target from current levels: “We see the stock as close to fully valued.”
Citigroup lifts Genting Singapore (G13.SG) target price to $0.99 from $0.65 after substantially increasing FY10-12 EBITDA estimates to assume higher market share in Singapore’s gaming sector, says Dow Jones.
Research house notes cannibalisation has waned to 10%-12% from over 25% in first few weeks of Marina Bay Sands’ opening.
Genting Singapore (G13.SG) flat at $1.18 as interest in gaming stock waning with volume continuing to dwindle after run-up earlier July to six-month high of $1.21 in active trade following decision to sell money-losing UK operations to sister company Genting Malaysia (4715.KU).
Players likely taking breather while awaiting fresh leads, including upcoming 2Q10 results, before taking new positions. While analysts still lamenting stock’s rich valuations, many remain hopeful of Resorts World Sentosa’s prospects.
UOB KayHian lifts Genting Singapore (G13.SG) target price to $0.97 from $0.88 after increasing earnings forecasts for FY10 to $438 million from $174 million, for FY11 to $504 million from $397 million to assume higher gaming income from Resorts World Sentosa, according to Dow Jones.
Still, UOB KayHian is keeping its Sell call on view valuations pricey. Broker says non-gaming operations like Universal Studios Singapore theme park will continue to lose money in near term. Shares flat at $1.19.
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Bank of America-Merrill Lynch raises Genting Singapore (G13.SG) target price to $1.40 from $1.22 after increasing EBITDA estimates for FY10 by 13%, for FY11 by 12% to account for sustainable strong performance of slot machines at Resorts World Sentosa, says Dow Jones.
Genting Singapore (G13.SG) well placed to expand beyond Singapore, bid for new greenfield opportunities in Asia, says JPMorgan, which has Overweight call, according to Dow Jones.
JPMorgan notes gaming group has $4.2 billion in debt, $3.3 billion in cash, will be able to generate average of $1 billion in EBITDA over next few years, with remaining capex for phase 2 of Resorts World Sentosa only about $800 million.
Genting Singapore (G13.SG) off 1.7% at $1.14 as current soft market conditions prompt investors to lighten positions after run-up late last week to six-month high of $1.21 on gaming group’s move to sell its money-losing UK operations to sister company Genting Malaysia (4715.KU), says Dow Jones.
Current selling not widespread as volume around 50 million shares vs more than 150 million in each of last two sessions. Immediate support at last week’s low of $1.12.
“We agree with management’s intention to focus its energy on Resorts World Sentosa and also opportunities in the region, as gaming here is still likely to experience good growth prospects,” says OCBC Investment Research, which has Buy call, $1.34 target.
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Genting Singapore (G13.SG) +0.8% at $1.19 as proposed GBP340 million ($688.8 million) sale of money-losing UK operations to sister company Genting Malaysia (4715.KU) fuels hopes for stronger earnings profile, says Dow Jones.
While Genting Singapore will book FX translation loss of $338 million this year, bottom-line excluding exceptional item expected to improve. “Considering that the UK gaming operating business remains very tough, we view this exit as an escape for Genting Singapore and we view it as fortunate in that there was a buyer in the market,” says Citigroup, “It means Genting UK will no longer drag on the performance of Resorts World Sentosa.”
Genting Singapore’s (G13.SG) sale of UK casino business positive as it’s tough for operations there to significantly grow profitability without further industry deregulation, such as allowing large-scale casinos, says Macquarie, according to Dow Jones.
Macquarie adds UK government likely to impose fairly high tax rates on any new casinos. Notes Genting Singapore will benefit from sale through savings on interest costs due to lower debt, being able to focus purely on Resorts World Sentosa.
Singapore shares closed lower on Thursday with the blue-chip Straits Times Index down 15.16 points to 2,820.35. Volume was 1.02 billion shares worth $1.07 billion. Losers led gainers 304 to 119.
US stocks fell last night as manufacturing and labour market data heightened fears of a double-dip recession before Friday’s key employment report.
Shipping companies: The Baltic Dry Index, which measures the cost of transporting commodities, dropped 2.3% in London yesterday, taking its 26-day loss to 44%. That’s the gauge’s longest losing streak since August 2005.
Genting Malaysia Bhd. said it will buy its Singapore affiliate’s UK casino businesses for 340 million pounds ($710 million) to expand overseas.
“The acquisition is in line with Genting Malaysia’s strategy to grow its core businesses of leisure, hospitality and entertainment internationally beyond Malaysia,” the Kuala Lumpur-based company said in a statement today.
SGX mainboard-listed Genting Singapore PLC today announced that it will divest its casino businesses in the United Kingdom (Genting UK) to Genting Malaysia Berhad.
Genting Singapore says the divestment of the UK operations will allow the company to focus on strengthening the large-scale integrated resort experience it gained in the successful development of Resorts World Sentosa (RWS), giving it a competitive edge to capitalise on opportunities that arise in potential gaming jurisdictions.
