Friday, 1 March 2013

Genting Malaysia - Growing overseas contribution BUY


- Maintain BUY on Genting Malaysia Bhd (GenM), with an unchanged RNAV-based fair value of RM4.30/share.

- GenM’s FY12 core earnings were in-line with our expectations and consensus estimates. EBITDA of the group’s leisure and hospitality division rose 4.7% to RM2.4bil in FY12, underpinned by stronger contributions from the units in the UK and New York.

- Revenue of the leisure and hospitality division in Malaysia inched up 1.3% to RM5.5bil in FY12, aided by a higher volume of business which offset a low win-percentage. We understand that the volume of business in the mass market and VIP segments rose by a single-digit percentage point YoY each in FY12.

- The number of visitors to the highlands resort rose 3% to about 20.9mil in FY12 while casino patronage inched up 1ppt. High-rollers accounted for 36.5% of the gaming revenue in FY12 versus 36% in FY11.

- Day-trippers accounted for 73% of GenM’s visitors in FY12. The balance 27% of visitors were hotel guests.

- Malaysians accounted for about 63% of hotel guests at “Resorts World Genting” in FY12, while Genting WorldCard members took up 70% of the hotel rooms.

- EBITDA of the leisure and hospitality division in the UK improved 23% to RM195.4mil in FY12 from RM158.9mil in FY11 driven by an increase in attendances and the volume of business.

- Attendances at the provincial and London casinos improved 2% each in FY12. The casinos in London enjoyed a 35% increase in business volume in FY12, while the provincial casinos recorded a 3% expansion.

- On the back of a full-year impact, “Resorts World New York” (RWNY) recorded an operational EBITDA of RM173.2mil in FY12 against RM23.6mil in FY11. EBITDA margin was at 20.3% in FY12.

- RWNY achieved an average win of US$372/day in FY12, which was significantly higher than the simple industry average of about US$241/day.

- In January 2013, RWNY’s average win was US$381/day before softening to a range of US$330/day to US$432/day in the first three weeks of February.

Source: AmeSecurities

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