Genting SP

Genting SP: DBSV expects GENS' 2nd perpetual bond issue of up to $700m will be well received given the over 4X subscription to the first $1.8b issue in early Mar. Says the issues give GENS a huge warchest as it seeks new growth drivers outside Singapore, with RWS expected to be completed by 4Q12. Sees Japan as the most interesting given its large size (based on existing pachinko market), global tourism appeal, and ready infrastructure - albeit a long and complicated legislative process to liberalize gaming. Says GENS will unlikely be interested in Korea if existing restriction on locals gambling in casinos remains (Kangwon Land's (035250.SE)exclusive domestic casino operation rights was recently extended by another 10 years to 2025, but Korea may liberalize after Japan in order to protect its market share). The house keeps a Buy call with TP $2.06.
The stock is +0.9% at $1.68.

Citi on the other hand, says GENS' newly-issued perpetual securities is likely to further reduce profit attributable to common shareholders by ~$36m, if the greenshoe option is exercised. Says, with mgt guiding capex requirement of only ~$500m in 2012 and the dividend payment of ~$122m, the house expects most of the funds raised will be used for investment opportunities outside Singapore; notes while mgt views this as a good opportunity to build up its war chest, the house continues to question the timing of such fundraising exercise. Highlights the stock trades at around 12.8X 2012 EV/EBITDA, roughly a 10% premium to Macau peers; believes the stock is expensive given the difference in growth profiles between Singapore and Macau. Citi keeps a Sell call with TP $1.47.