Genting SP

Genting SP: UBS has results preview. Note that GENS reports 3Q12 on 12th Nov. House forecast RWS to report 3Q net rev of $699m and EBITDA of $320m, +2% qoq and down 15% yoy. On hold adjusted basis, qoq and yoy EBITDA change would be +8% and -9% respectively, although note 3Q11 was already depressed by higher than usual provisions for VIP. The MBS results confirmed that SG market has continued to stagnate across both VIP and mass gaming segments. Higher provisions for VIP receivables at MBS continue, as gross receivables continue to grow even as VIP revenues remain weak. For mass market, MBS S$ mass win/day is very slightly down qoq, with weaker performance in slots/ETG, reflecting lower local participation although slight market share gain by RWS is also possible. Reinvestment risk still focal point As of end Q2, GENS had $1.2bn of financial assets in addition to $4.7bn of gross cash. Reinvestment risk will continue to be a focal point given the paucity of attractive new resort development opportunities. Any successful bid for SG hotel land site should be taken positively in this context. Overall, house netural with $1.36 TP, based on 2013E EV/EBITDA of 10x.