Asia gaming market - most promising. In addition, many investors are probably upbeat about its potential market here in Asia, which industry watchers believe is without doubt the most promising - growing at 15.7% CAGR for the next five years1. According to a PricewaterhouseCoopers' (PWC) report, gaming revenue in Asia hit US$15.6b in 2007 and is expected to grow to US$30.3b in 2011. However, PWC noted that competition is also widely expected to heat up, as more countries mull the possibility of either setting up their own casinos (like Taiwan, Japan and even Thailand) or expanding the number of existing ones (South Korea).
UK operations may continue to languish. On the other hand, Genting's UK operations could continue to languish, given the dismal economy there. Latest official data showed that UK's economy shrank by 1.9% in 1Q09, while household spending fell by 1.2%, the biggest drop since 1980. Theofficial forecast is for the UK economy to contract by 3.5% this year. As such, we continue to pencil in a loss for its operations there this year.
Maintain SELL. In line with the recent re-rating of global equity markets as well as the improvement in risk appetite, we have bumped up our FY10 estimates and in the process, raised our fair value from S$0.45 to S$0.76.But realistically, we think that the turnaround would probably come in FY11. In the meantime, Genting may have to also content with higher interest payments as it continues to draw down its S$4b loan. Meanwhile, we do not think that Genting will be making a bid for the MGM Mirage Macau asset sale, as the issue can be quite sensitive. Back in 2007, Genting and Star Cruises had proposed a casino venture in Macau with Stanley Ho but the deal was later called off after the group received an adverse response from the Singapore government. Maintain SELL.
Sponsored Links
No comments:
Post a Comment