Friday, 1 March 2013

Genting Malaysia - Slight Dent From Lower Luck Factor


The group’s FY12 results were in line with both consensus and our expectations. Its Malaysian  core  gaming  operations  posted  double-digit  growth  in  VIP  gaming  and mid  single-digit  growth  for mass  market  gaming,  but  this was  a  partial  drag  on win
rates.  The  current  share  price  offers  a  good  opportunity  to  accumulate  as  its valuation  an  undemanding  12.9x  PE.  Genting  Malaysia’s  stable  domestic  mass market  gaming  revenue  despite  global  macroeconomic  uncertainties  is  a  key attraction. Maintain BUY, with our FV unchanged at RM4.21.
In  line.  The group’s headline earnings were impacted by RM183.9m in impairment and RM48.2m  in  construction  cost  overruns  at  its  casinos  in  the  US.  Adjusting  for  these exceptional items, Genting Malaysia’s FY12 core net profit of RM1.57bn met expectations,
representing  99.7%  and  99.3%  of consensus  and  our  full-year  forecasts  respectively.  The impairment was related to a write-down of goodwill from the acquisition of the Omni Centre in Miami in Florida, certain casinos and provincial casinos’ assets under its UK operations, and the carrying value of its casino concession agreement in Egypt. 
Source: OSK

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