Genting SP

Genting SP: read through from MBS results. MBS reported rolling chip volume of US$12.8b, +19% qoq, +26% qoq. Net revenue was US$848m, +5% qoq, +45% yoy. Adjusted EBITDA was US$473m, +11% qoq, +66% yoy, helped by seasonality and luck factor of 3.58%. Adjusted for luck, Morgan Stanley estimates revenue could be lower by US$93m, and EBITDA lower by US$50m. MBS played down the impact of “Int’l Mktg Agents” (ie. junkets) allowed at GENS, saying it is no different from the 100 salespeople that MBS employs and thus sees limited impact. Morgan Stanley says read-through for GENS is negative. Thinks that VIP rolling chip, while volatile, is unlikely to surprise on the upside. Notes mass mkt is also not growing much, with MBS having reported a 7% decline in mass table revenue and flattish slot revenue in 1Q12. Adds GENS could see an increase in opex with opening of the west zone. Keeps stock at Equal-weight.