Genting HK

Genting HK: 50% jointly controlled entity NCL posted a 3Q12 net profit of US$128.2m (+19.2% yoy), ahead of expectations on lower than expected costs. Net yield rose 1% to US$206.7m, on higher on board and other revenue and lower commissions, transportation and on board expenses. UOBK expects continued growth prospects for NCL as it continues its fleet expansion programme. The first of NCL’s newbuilds, the 4000 berth Norwegian Breakaway is on track for delivery by mid 2013, while its sister ship Norwegian Getaway will be delivered in Jan ’14, ahead of schedule. It has also placed an order for a 3rd new vessel – a Breakaway plus-class ship with 4200 berths for delivery in Oct ’15 at a cost of Eur 700m with options for a second sister vessel. The house is reviewing its forecasts for NCL with a modest upward revision for 2012 taking into account the strong results ytd and to factor in the earlier than expected delivery of Norwegian Getaway in 2014. It is also reviewing forecasts for GENHK, pending Travelers Int’l 3Q12 results. UOBK is reviewing its Sell call on GENHK as share price has retraced to its SOTP-based TP of US$0.32, although share price may continue to be sidelined by its rather expensive quest to have a substantial stake in Australia listed casino operator Echo. Recall GENHK bought a 5.2% stake in Echo in Jun ’12 for A$150.9m at a pricey FY13e EV/EBITDA of ~10x, and has applied to the regulator to up its stake to as high as 25%. The stock is +4.7% at $0.335.