Genting SP: CS maintains O/p with TP $2.50, note that stock price divergence is unwarranted.
Sell-off in Macau gaming stocks has dampened sentiment on Genting and concerns on tightening of credit conditions in Macau have possibly created similar concerns for Spore.
GENS has a strong balance sheet (net cash) and offers direct credit to VIP players. House remain bullish on GENS’ long term prospects due to:
(1) rising tourist arrivals to Spore,
(2) positive economic growth in the region,
(3) a high proportion of local millionaires bodes well for long-term VIP casino revenues,
(4) mainland Chinese have become the top foreign purchasers of residential properties in Spore and
(5) robust commodity prices in Malaysia.
Potential catalysts include: the realisation that GENS is still in the early part of a multi-year growth trajectory, potential licensing of junkets or if market sentiment improves.
No comments:
Post a Comment