Genting SP

Genting SP: Morgan Stanley says, bad news is likely at an end, but near-term catalysts are limited. Notes GENS' concerns are well-known by the market, including new regulation, no local mass-market growth, limited VIP growth on lack of junkets, continued bad-debt provisions, market-share and margin concerns and low dividend payout. Tips potential upside as Marine Life Park losses will likely decrease in 2013. But it doesn't expect a dividend announcement near-term; believes that mgt is keeping cash for overseas gaming opportunities, including Japan and Korea, and considers additional cash as the key differentiator. Adds, it doesn't see any sizeable opportunities at hand. "Political changes in Japan and Korea's not allowing locals to gamble in the newer proposed casinos (near Incheon) could mean that GENS (and other hopefuls) will have to wait for some more time." Notes, current valuations look unattractive at a premium to Macau peers. Nevertheless, the house raises TP to $1.10 from $1.05 on rolling forecasts forward, keeping an Underweight call. Cuts its 2012-14 earnings estimates by 12%-14% after weaker-than-expected 3Q12 results.