Genting SP: UBS Upgrade to Buy from Neutral with $2.30 TP. Note that grp is a bona fide play on wealth creation in China. Believe RWS will continue to benefit from strong VIP growth out of North Asia (esp China) Expect VIP volumes of US$18-20b/qtr at RWS in 2011. Believe the increase in credit risk profile is manageable and collections have been solid…..
Add that RWS collected more than $1bn from VIP customers in 2010. Conclude that China VIP growth, capacity expansion in 2012, a net cash position and potential for new projects together make GENS attractive stock. YTD Genting SP has underperformed Macau by 25% & STI by 7%.
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