Genting SP

Genting SP / Las Vegas Sands: First read through from LVS results indicate weak results from MBS in Singapore. 4Q12 adjusted EBITDA was US$302.5m, -29.1% yoy, as EBITDA margin tumbled from 52.9% to 42.2% yoy. The unfavorable impact was due to a significantly lower Rolling Chip win % of 2.14% from 3.34% yoy, despite MBS recording the second highest quarterly volume in its history at US$16.47b, +53% yoy. Other gaming statistics were slightly weaker, with non-rolling chip drop at US$1.1b, -3.2% yoy, and Slot Handle at US$2.7b, -2.0% yoy. By extension, the market may express concerns about the possibility of a weaker showing at GENS. The higher than expected hold-rate volatility leads to larger EBITDA volatility, and may raise the equity risk premium on the Singapore gaming business. Overall, LVS 4Q12 results topped analysts’ estimates, with despite profit being little changed. FY12 was a year of record earnings, led by growth in Macau, which saw a pick up in gambling. Macau revenue rose 48% yoy (vs Spore revenue of -11%). Adelson noted, he “couldn’t be more optimistic about the future”. Expect a renewed focus on Macau plays today, which could further take the shine away from Singapore-listed GENS. Nevertheless, GENS is +3.4% at $1.515.