(i) Kien Huat Realty Sdn Berhad has disposed of 265,809,000 shares in the company by Lakewood Sdn Bhd via a placing agreement;
(ii) Parkview Management Sdn Berhad as trustee of a discretionary trust, has disposed of 265,809,000 shares in the Company by Lakewood Sdn Bhd via a placing agreement; and
(iii) G Z Trust Corporation as trustee of a discretionary trust, has disposed of 649,073,320 shares in the Company by Golden Hope Unit Trust via a placing agreement.
Positive operational development. A recent company visit confirmed/revealed some positive developments - Resorts World at Sentosa may be opened by Dec 2009, perhaps earlier than Marina Sands. The Singapore government to build a covered and air-conditioned walk-alator from Vivo City to the resort (7 minutes walk) by mid-2010.
Strong earnings prospects at Resorts World at Sentosa (RWS) but fundamentally priced in. On the optimistic side, our initial calculations show that by 2011, RWS could churn out revenue and net profits of US$2.6b and US$344m respectively. Key assumptions are 700 gaming tables at the casino, 60:40 gaming:non-gaming revenue mix, 25% Ebitda.
The shares could maintain the upward momentum, heading towards the casino's opening day. However, the theoretical floor NPV of this project would only be US$0.56b or S$0.78b, assuming 9% discount factor and 5% revenue growth rate beyond 2011 until the end of the concession on 2036. The low NPV reflects the high capex of around S$6.5b. Fundamentally, the stock appears expensive if the NPV enhancement is stacked against the company's market cap. Without RWS, the company is expected to be loss making due to weak casino operations in the UK. On PE basis, assuming just contribution from RWS and that the UK operations break-even, Genting Singapore is trading at around 16.5x prospective EPS of around S$ 5 cents.
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