Genting SP

Genting SP: CIMB downgrade grp to UnderPerform from Neutral with $1.20 TP. House believe the co faces not just earnings risk but increased risk premium from overregulation and other issues that will restrict its capacity to grow. Make no changes to EPS forecasts and RNAV-based target price. M&A seems to be the only rerating catalyst at this stage. Believe the weak performance seen over the last two qtrs represents the start of a protracted earnings downcycle. Think there is more downside risk as Resorts World Sentosa (RWS) grapples with the challenges of restricting its focus on the international mass mkt as the only avenue of growth.