Genting Singapore

UOBKayhian on 12 Nov 2014

FY14F PE (x): 20.8
FY15F PE (x): 19.9

9M14 numbers in-line. Genting Singapore (GENS) reported 3Q14 EBITDA of
S$253.9m (-19.1% qoq, -26.9% yoy), bringing 9M14 EBITDA to S$968.0m (+6.6%
yoy). Despite poor quarterly numbers, 9M14 results were in line with our expectation
(74% of full-year forecast) as we had implicitly assumed a lower VIP win rate for 2H14.
Maintain BUY and SOTP-based target price of S$1.32. On top of 12x 2014F EBITDA,
we have also imputed a 10-cent Japan ‘option value’ into our target price. At this
juncture, expectation for GENS is low and we believe most negatives from the Chinese
VIP slowdown have been priced in. Trading at 10x forward EBITDA, we see limited
downside risk and its valuation premium has narrowed against sister companies within
the Genting group (8-9x). Moreover, we expect share price to be supported as
institutional holdings is currently low at around 20% vs 40% for Genting Malaysia.