2Q10 results beat all expectations: Genting Singapore’s (GENS) 2Q10
results beat all expectations (we were in line with consensus). The
Singapore resort contributed 2Q10 revenue of S$861 mn and EBITDA of
S$503.5 mn, reflecting a full quarter of casino and theme park contributions.
We expect consensus upgrades on the back of these stellar results.
Raise target price to S$1.68; upgrade to OUTPERFORM: We have raised
our FY10E-FY11E EBITDA by 68-69% to reflect higher casino revenues and
higher EBITDA margins. We raise our target price on Genting Singapore to
S$1.68 and upgrade our rating to OUTPERFORM (from Underperform
previously).
UK proposal goes to vote next week: GENS has proposed to sell its UK
casino estate to Genting Malaysia for S$689 mn. This is equivalent to a
FY10E EV/EBITDA of 13.3x and 11.2x for FY11E, a 60-78% premium to UK
peer, Rank Plc. If this proposal goes ahead, Genting Singapore will book a
net loss of S$235 mn (due to exchange losses of S$339 mn)
Upgrade to OUTPERFORM/BUY from previous quarter.
View what other broker's thought here.
Source: Credit Suisse
