Genting: Nomura maintains Reduce ratingo on stock with $1.41 TP. House note that in a recent Singapore todayonline.com article, the SG govt is studying ways to deter frequent gamblers from visiting the casinos, quoting Acting Minister for Community Development, Youth and Sports, the govt will soon amend the Casino Control (Advertising) Regulations to make it crystal clear to both casinos that they cannot target the domestic market.
While the reported impending changes are not known, the latest development is consistent with house core assumptions that unlike Macau, where govt policies are encouraged to make Macau into a gaming hub, SG government has no plans to make Singapore a gambling hub, in house view. As a result, growth potential is likely to be more moderate (+10% p.a. according to estimates) in a relatively small market like SG, unless junket licenses are issued, GENS’s valuations (30% premium to the Macau peers using house estimates) are not inexpensive.
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