Genting HK

Genting HK: UOBK upgrades to Hold from Sell as the stock is now trading near its US$0.37 target after easing 16.7% YTD. Says its upgrade factors in the potential to open a new casino (Resorts World Bayshore City) outside Manila Bay, and near-term benefits from falling crude oil prices which is positive for its cruise division. Theoretically, every 10% fall in bunker costs raises its EBITDA by 3 - 4%. Notes Resorts World Manila delivered a solid 1H11 performance and should be on track to meet forecasts, which assumes a 116% jump in earnings contribution to GENHK this year. Says 50%-owned Norwegian Cruise Line swung back to the black in 2Q11, within expectations. But adds, present valuations appear fully valued vs peers, and while GENHK is still expected to deliver commendable earnings growth this year, does not foresee other strong re-rating catalysts materializing in the near term. Tips entry price at US$0.35 and below.