Genting SP

Genting SP: 3Q10 results in line to slightly below consensus. Revenue of $744m, vs just $12m yoy, -24% qoq. EBITDA was $348m, -31% qoq, at lower end of Street range of $310-420m. EBITDA margin was 47%. Net profit was $188m, vs net losses of $93m yoy, but -53% qoq…

Sequential weakness expected given competition from opening of Marina Bay Sands, which generated US$242m (~S$310m) EBITDA, 49.7% EBITDA margin. Luck factors (VIP hold) also normalized vs an exceptional 2Q. GENS mkt share now ~55% vs 69% in 2Q…

Mgt remains upbeat. Says 3Q still a strong showing, business is sound and sees further potential for growth as more gaming tables, Universal Studio’s rides are introduced. Seasonal peak 4Q due to yr end school holidays, festivities, travelling season should provide support.
Deutsche keeps Buy, $2.60 target. Says any share price weakness offers a good buying opportunity for exposure to Spore’s robust gaming mkt…

Other broker upgrades include Citi (TP $2.75 from $2.45 ), Daiwa (TP $2.93 from $2.06 ), Credit Suisse (TP $2.65 from $1.6, JPM ($2 from $1.55 ).
Technically, near term, indicators appear negative, with negative divergence appearing on the RSI, and fast Stochastic starting to hook downward from overbought levels. Near term support at $2.10 (recent low on 27 Oct).