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Flash Note – Genting (BUY, maintain) - Another round of earnings cut, cautious outlook




Affin Hwang Investment Bank Bhd


06 Aug 2013





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GENS’ annualised 1HFY13 EBITDA is 18% below Affin estimates Overall, we believe there is a cautious note with regional overseas casino businesses slowing down (especially in the mass market segment) and Resorts World Sentosa experiencing lower tourist arrivals on the whole. Importantly, we estimate 2QFY13 rolling chip volume (RCV) contracted 17% qoq with a market share of 49% in Singapore’s duopoly gaming market. Despite an overall stronger 2QFY13 net profit (thanks to an improvement in win percentages sequentially and 7% qoq jump in non-gaming revenue), 1HFY13 EBITDA contracted 18.7% yoy to S$560.5m. Annualised, the earnings were 18% below Affin and street estimates. Despite 1QFY13’s earnings downgrade (from our end as well as consensus), it appears that we may still be a tad optimistic in our earnings forecast in view of the cautious gaming spending patterns emitting from mainland Chinese punters (which makes up a significant chunk of GENS’ VIP gaming volume).

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