Genting SP: UOBK met with mgt. Expects poorer-than-expected gross gaming revenue (GGR) at Resorts World Sentosa (RWS) in 4Q11 - the first significant qoq contraction since the RWS begun operations. Believes VIP visitorship took a dip in the traditionally strong 4Q attributable to the close time gap between the Western and Chinese New Year festive season in Dec-11 and Jan-12.
But anticipates a better 1Q12 as RWS is set to open its Equarius Hotel in conjunction with the CNY Year festive season which should draw more VIP players to RWS. Also, RWS has recently ramped up its slot count to 2,400 units (vs max allowable 2,500 units) from the earlier 1,859 which should strengthen the mass market business.
Opines that legalisation of junket operators could be round the corner (ie. within next few mths) premised on two factors – a) mgt appears more confident with the junket licensing issue, and b) CRA’s audit period on the junket operators has ended.
Reiterates Buy with TP$ 2.04.
The stock is +5.5% at $1.62.