*Official* Genting SP

[felixleong]

I'm also watching Genting SP, bro Felix.

How come our moves are mirrored even though I don't know you (and you don't know me)?

An immediate problem with me is limited amount of money to buy.

great minds think alike ^_^

 

[felixleong]

DBS research on GENT

Challenging year ahead

 4Q14 net profit fell 36% y-o-y to S$89m, below expectations

 Challenging operating conditions in 2015

 Potential for higher bad debts near term

 Maintain HOLD, TP reduced to S$1.00

4Q14 results below. Contrary to our expectations, the VIP win rate dipped to 2.2%, below the theoretical 2.7-3% range. Genting Singapore (GENS) was also unable to sustain its high 50’s/60’s VIP rolling chip market share (54% share), as volumes fell an estimated 24% y-o-y. Combined with 42% higher impairments on receivables (c.S$82m), adj. EBITDA and net profit fell 24% and 36% y-o-y to S$190m and S$89m, below our S$333m and S$169m estimates, respectively.

Decline in VIP volumes and higher bad debts. During its results call, GENS guided that it is scaling back its VIP business in view of risk to collections and some clients facing tighter liquidity constraints. Operating conditions are also expected to remain challenging for the rest of 2015, with no growth expected in the VIP business. GENS also highlighted the risk of higher bad debts near term. To counter the softness in the VIP operations, GENS will focus on the mass segment. While we had already imputed these factors by projecting a 5% drop in VIP rolling chip and 3% lift in mass drop this year, the weaker than expected FY14 results and higher assumed bad debt provisions lead us to cut our FY15-17F earnings by 9-18%, as well as lower our DCF-based TP to S$1.00 from S$1.08.

Maintain HOLD. While we project a modest recovery in 2015, mainly on the back of a normalisation in the VIP win rate (c.2.6% in FY14 vs. 2.85% in FY15F) and some growth in the mass segment, we think this has largely been priced in. In addition, with recent press reports indicating that the Chinese government may clamp down on its citizens visiting overseas casinos and no clear visibility on the VIP business returning to its prior high growth rates, we see limited near term catalysts for GENS to trade at its historical earnings multiples. Thus, we maintain our HOLD recommendation.

 

[felixleong]

CIMB on Genting

Shifting focus to mass

GENS’s FY14 adjusted EBITDA of S$1.16bn was below expectations at 88%/89% of our/consensus full-year forecasts. The underperformance came from: 1) lower-than-expected VIP hold rate of 2.2% (vs. our forecast of 3.2%), 2) lower rolling chip volume, as it was more careful in extending credit to VIPs, and 3) higher bad debt expense. We cut our FY15-16 EPS forecasts by 1-8% in expectation of lower rolling chip volumes and higher bad debt charges. Our DCF-based target price falls to S$1.20 as a result. GENS remains an Add, with overseas expansion as the key re-rating catalyst, while the opening of Genting Hotel Jurong in mid-2015 will provide downside protection to mass GGR at GENS’s Resorts World Sentosa (RWS).

VIP disappointed, likely to get worse before getting better

4Q14 adjusted EBITDA fell 25% qoq to S$190.2m, largely due to lower VIP gross gaming revenue (GGR) and higher bad debt charges. The VIP hold rate of 2.2% was below the theoretical average of 2.85% and our estimate of 3.2%. Rolling chip volume of c.S$15bn in 4Q fell short of expectations as RWS was more cautious in extending credit to VIPs. As a result, its market share fell 6% pts qoq to 54%. Bad debt charges doubled to S$82m, which management explained was a result of delayed repayment for credit granted to customers 9-12 months ago. The VIP business is expected to remain challenging in 2015, with bad debt provisions staying high over the next 2-3 quarters.

Shifting focus to mass, with the help of its Jurong hotel

The mass segment fared better, as RWS’s market share of mass GGR fell only 1% pt to 43% in 4Q, although its competitor MBS is building a stronghold in the mass gaming market. In the past, RWS’s strength was in the VIP segment but it is now shifting focus to draw more mass and premium mass visitation from Southeast Asia to offset the fall in VIP volumes. GENS is ramping up marketing efforts and hopes to attract more mass visitation in 2H15, with the Genting Hotel Jurong that will add 550 rooms when it is fully opened in Jun.

Overseas opportunities remain the key catalyst

Management remains optimistic about opportunities in Jeju and Japan. The positive developments include receiving construction approval for Resorts World Jeju and its ground-breaking ceremony on 12 Feb 15. Furthermore, GENS has exited most of its portfolio investments in FY14 to prepare for the two big projects in Jeju and Japan, which yielded net inflow of S$443m. GENS ended FY14 with net cash of S$2.0bn to pursue expansion opportunities.

 

[felixleong]

Genting on SUPER down trend

coming towards 90 cents?

anyone to defend at this level?

or wait for 80 cents level?

 

[pcmdan]

me waiting for 80cents haha

 

[felixleong]

me waiting for 80cents haha

ok if really got 80 cents, i will join u too hehehe

 

[RedSlayer]

0.925 and falling. I think better to wait until .90 then see again.

2 more months to hotel opening and now they are borrowing over 2 billion. Anyone got confidence to buy?

Sent from parallel universe using GAGT

 

[spiritGate]

0.925 and falling. I think better to wait until .90 then see again.

2 more months to hotel opening and now they are borrowing over 2 billion. Anyone got confidence to buy?

Sent from parallel universe using GAGT

genting final push will be during sea games, hope the attraction of tourist can help to boost genting business

 

[ceecookie]

0.925 and falling. I think better to wait until .90 then see again.

2 more months to hotel opening and now they are borrowing over 2 billion. Anyone got confidence to buy?

Sent from parallel universe using GAGT

Not to mention they paid US$550 million to buy a luxury cruise line

The Asian gaming giant that purchased the former Miami Herald bayfront site in downtown is set for another surprise purchase: California-based luxury cruise line Crystal Cruises.

The acquisition agreement expands Genting’s current cruise portfolio, which includes 28 percent of Miami-based Norwegian Cruise Line Holdings. The parent company, which owns Norwegian Cruise Line, last fall purchased the company that includes premium line Oceania Cruises and luxury line Regent Seven Seas. Genting wholly owns Star Cruises, a major Asian cruise line.

The acquisition, from Crystal parent Nippon Yusen Kabushiki Kaisha (NYK), is expected to closed in the second quarter of 2015, according to a news release. Under the deal, Genting Hong Kong, a subsidiary of publicly held Genting Group, will pay $550 million in cash, or $276,000 per lower berth.

Genting to buy luxury Crystal Cruises for $550 million | Miami Herald Miami Herald

 

[felixleong]

The only thing i dont like is genting the dividends 1 cent very low

 

[endlssorrow]

Don't buy laaaaaaaaaa

Siao keep droppin

Buy liao dun know when will HUAT

 

[pcmdan]

haha now buy i think not ez huat..use the $ go jackpot maybe still hav higher chance haha

 

[winorlose]

Looks like a long downturn..

Especially Jeju will need extensive funding.. either their do rights or issue bonds?

 

[felixleong]

Looks like a long downturn..

Especially Jeju will need extensive funding.. either their do rights or issue bonds?

If they do rights then GG liao

If they issue bonds i might buy their bonds instead hehe

 

[RedSlayer]

They are already borrowing money and faces competition from other casinos. Might drop lower than 0.80. Unlikely they will do rights now imo.
And yea the dividend is always 1 cent lol.

Sent from parallel universe using GAGT

 

[RedSlayer]

Even with new hotel opening I reckon they would need a long time to recover price to $1...

Sent from parallel universe using GAGT

 

[Sinkie]

There Might Be A $1.1 Billion Hole In Genting Singapore PLC’s Pocket

By Stanley Lim, CFA - March 5, 2015 | More on: G13


In 2008, the future looked bleak for Genting Singapore PLC (SGX: G13). Back
then, the global financial crisis was unfolding and investors were unsure
if Genting Singapore would ever be able to raise the funds needed to
complete Resorts World Sentosa in an environment where capital was
extremely scarce.

There and back again

But, the firm did manage to develop the integrated resort and its doors
first opened in early 2010.

With the soft launch of Resorts World Sentosa, Genting Singapore’s share
price rocketed as investors were likely excited by the company’s prospects;
from a low of less than S$0.90 in April 2010, Genting Singapore’s shares
ended the year at nearly S$2.20.

But since then, shares of Genting Singapore started falling steadily and
sits at S$0.95 at the moment. Although part of the reason for the drop
might be due to investors’ irrational exuberance over Resorts World
Sentosa, it could also be a reflection of a potential crisis that’s looming
for Genting Singapore – a S$1.1 billion crisis.

A giant burning hole

Due to the clampdown in corruption by the Chinese government, casinos
around the region have seen a sharp drop in their gaming volume. Genting
Singapore was not spared; in the fourth quarter of 2014, the company
experienced an 8% year-on-year decline in revenue. But, a falling top-line
might be the lesser of Genting Singapore’s worries.

High rollers, or premium players as Genting Singapore calls them,
contributes a large portion of the company’s revenue. However, many of
those premium players are actually allowed to gamble in Genting Singapore’s
casino using credit that’s extended by the company. What this means is
gambling losses incurred by the premium players who played using credit can
be paid at a later date and are thus treated as trade receivables by
Genting Singapore.

A quick look at the company’s latest balance sheet shows that it has
current trade and other receivables (receivables that are due by 31
December 2015) of more than S$1.1 billion as of 31 December 2014. That is a
significant amount. For some perspective, that’s 38.5% of Genting
Singapore’s revenue for 2014 and nearly 1.7 times its net profit.

Having receivables which can be collected on time is all right. The issue
here is that more bad debts may be on the table for Genting Singapore. In
2014, the integrated resort owner had to impair S$262 million worth of
trade receivables (to impair is to essentially treat the receivable as
uncollectable), up 42% from 2013.

The increase in impairment, as well as the sheer size of the dollar amount
of those receivables, should really prompt shareholders to question how
much of the S$1.1 billion in receivables is actually recoverable. It is a
black box for investors to ponder and could potentially become a big
burning hole in Genting Singapore’s pocket.

Foolish Summary

Imagine lending S$1.1 billion to a gambler who is most likely to be a
tourist and who now has to return to his home country if he’s not already
back home. Recovering that S$1.1 billion may not be a situation that can
easily be resolved.

Hopefully, Genting Singapore’s management can help its investors understand
the whole issue better in official statements or during its upcoming Annual
General Meeting (AGM) this year.

 

[Shion]

Nowadays I go casinos, like not so crowded as compared to last time

 

[felixleong]

There Might Be A $1.1 Billion Hole In Genting Singapore PLC’s Pocket

By Stanley Lim, CFA - March 5, 2015 | More on: G13


In 2008, the future looked bleak for Genting Singapore PLC (SGX: G13). Back
then, the global financial crisis was unfolding and investors were unsure
if Genting Singapore would ever be able to raise the funds needed to
complete Resorts World Sentosa in an environment where capital was
extremely scarce.

There and back again

But, the firm did manage to develop the integrated resort and its doors
first opened in early 2010.

With the soft launch of Resorts World Sentosa, Genting Singapore’s share
price rocketed as investors were likely excited by the company’s prospects;
from a low of less than S$0.90 in April 2010, Genting Singapore’s shares
ended the year at nearly S$2.20.

But since then, shares of Genting Singapore started falling steadily and
sits at S$0.95 at the moment. Although part of the reason for the drop
might be due to investors’ irrational exuberance over Resorts World
Sentosa, it could also be a reflection of a potential crisis that’s looming
for Genting Singapore – a S$1.1 billion crisis.

A giant burning hole

Due to the clampdown in corruption by the Chinese government, casinos
around the region have seen a sharp drop in their gaming volume. Genting
Singapore was not spared; in the fourth quarter of 2014, the company
experienced an 8% year-on-year decline in revenue. But, a falling top-line
might be the lesser of Genting Singapore’s worries.

High rollers, or premium players as Genting Singapore calls them,
contributes a large portion of the company’s revenue. However, many of
those premium players are actually allowed to gamble in Genting Singapore’s
casino using credit that’s extended by the company. What this means is
gambling losses incurred by the premium players who played using credit can
be paid at a later date and are thus treated as trade receivables by
Genting Singapore.

A quick look at the company’s latest balance sheet shows that it has
current trade and other receivables (receivables that are due by 31
December 2015) of more than S$1.1 billion as of 31 December 2014. That is a
significant amount. For some perspective, that’s 38.5% of Genting
Singapore’s revenue for 2014 and nearly 1.7 times its net profit.

Having receivables which can be collected on time is all right. The issue
here is that more bad debts may be on the table for Genting Singapore. In
2014, the integrated resort owner had to impair S$262 million worth of
trade receivables (to impair is to essentially treat the receivable as
uncollectable), up 42% from 2013.

The increase in impairment, as well as the sheer size of the dollar amount
of those receivables, should really prompt shareholders to question how
much of the S$1.1 billion in receivables is actually recoverable. It is a
black box for investors to ponder and could potentially become a big
burning hole in Genting Singapore’s pocket.

Foolish Summary

Imagine lending S$1.1 billion to a gambler who is most likely to be a
tourist and who now has to return to his home country if he’s not already
back home. Recovering that S$1.1 billion may not be a situation that can
easily be resolved.

Hopefully, Genting Singapore’s management can help its investors understand
the whole issue better in official statements or during its upcoming Annual
General Meeting (AGM) this year.

very good share, never knew they had so much bad debt
i shall avoid this counter liao, no matter how cheap
cause I'm pretty conservative... dun like this kinda risk

thanks again

 

[KeenKid]

Who is Stanley Lim ?

Did he operate like Muddy Water or Iceberg ?
Short big time first, then write a condemning report ?