RHB Equity 360° (Genting Singapore, Cement, Furniture, Allianz, Top Glove, EPIC; Technical: Measat) - 27/04/2010

Top Story : Genting Singapore – The competition starts now Outperform
Visit Note
♦ The Casino Regulatory Authority issued a casino licence to Marina Bay Sands (MBS) yesterday, 26 Apr. Nevertheless, recall RWS needed a few days to reset the systems back to zero and to get the real “chips” ready before it could officially open, and the casino only opened a full 8 days after the licence was awarded. If we assume a similar scenario, MBS may only open in a few days time.
♦ We believe MBS would likely face similar teething issues and would also take some ime to ramp up the hotel rooms and gaming tables to full capacity. As such, while we do expect to see some shift in visitors to MBS, we believe the effect could be short term. In addition, we expect MBS’ opening to actually enlarge, rather than shrink, the gaming market, as more visitors would likely come through Singapore once both casinos are open, as the “pull factor” would be greater.
♦ Seven takeaways from recent RWS visit: 1) >60% of tables operating currently; 2) no significant drop in visitor numbers since CNY; 3) table drops in line with expectations, mass table limits raised; 4) still waiting for junket approvals; 5) hotels still fully occupied; 6) Universal Studios Singapore tickets doubled up
already; and 7) pre-operating losses to be lower qoq in 1QFY10.
♦ Post-visit, we have tweaked our FY10-12 forecasts slightly, by +0.4-0.8%. No change to our S$1.35 fair value, based on blended average of EV/EBITDA (12x FY11 based on regional average) and DCF methodologies. At current price levels, GS’ FY11 EV/EBITDA of 11.8x is now at a 6.3% discount to FY11 regional peers average of 12.6x and 20% discount to Macau peers average. As such, while we expect some potential downside in share price upon opening of MBS, we believe downside risk is limited at these levels and advise investors to take this opportunity to buy the shares on weakness. Maintain Outperform.

RHB Equity 360°(Genting Singapore, Cement, Furniture, Allianz, Top Glove, EPIC; Technical: Measat) - 27/04/...