Genting HK

Genting HK: 50% subsidiary Norwegian Cruise Line (NCL) reported inline 1Q12 results in the US. NCL’s net profit came in at US$3.3m, vs loss of US$10.7m yoy. Occupancy rate remained high at 107.6% despite the new capacity from the Norwegian EPIC ship that came on board in 2H10, indicating that demand and bookings are strong. Net yields, the leading indicator of the health of cruise liners, was up 2.4% yoy at US$161. Macquarie expects NCL EBITDA to improve to US$533m in 2012 from US$500m in 2011, adds inflection point will come in 2H13 and 2014, when 2 new large ships would be added to the fleet. The house keeps GENHK at Outperform with TP US$0.47. Sees catalyst in possible NCL IPO (est. 2012-13 timeframe). Adds at GENHK’s current stock price of US$0.37, the stub NCL business is available at only 5x EV/EBITDA, vs the ~8x multiple for the top 2 cruise liners in the US.