Thursday, July 28, 2011
Genting Spore: Citigroup upgrades to Buy from Hold but keeps $2.30 target price. Judging results from Las Vegas Sands, house reckons Marina Bay Sands has again taken mass market share from Resorts World Sentosa, & also likely won back some VIP share as well; but it adds that the possible market share loss to MBS has been largely priced in. Believes the worst is now behind Genting Spore & expects to see solid EBITDA improvement from 2Q11 onwards. Assuming a normalized hold rate, Citi expects Genting to generate 2Q revenue of $727m (-20% qoq) & EBITDA of $373m (-30% qoq). Notes that the $538m EBITDA generated in 1Q was largely due to an estimated 3.8% VIP hold rate. Citi raises its Spore gaming market size forecast to US$5.9b from US$5.4b & is now forecasting a 50/50 split in market share by 2012. Stock pulling back to its 50-day MA at $1.91 after yday’s scintillating run-up with underlying support at $1.86.