Genting SP

Genting SP: Reuters in an article highlight that SG 2 multi-billion-dollar casinos bear evidence of China's economic recovery. High rollers returned in force last qtr, noting that the revival in the lucrative VIP segment reversed a pattern that analysts had observed in recent qtrs, where whenever one co saw a rise in VIP business, the other usually reported a slowdown, suggesting that the two casinos were fighting over a limited pool of punters. But over the last three mths of 2012, both Sands and Genting reported strong yoy growth in that segment. Genting's results, released late on Thur, showed a 56% jump in its premium segment. Sands, whose earnings were released on Jan. 30, posted a 53% increase in what it calls rolling chip, a gauge of gambling activity in high-stakes VIP rooms. The jump in the high rollers business was accompanied by a sharp rise in credit to gamblers - for Genting, receivables were up 33% yoy to $960m, which some analysts cited as cause for concern because it could lead to an increase in bad debts. China typically accounts for at least half of the VIP gamblers in SG, Asia's, second-largest gambling market after Macau, with the rest coming primarily from Indonesia and Msia. Citi note that house was surprised it was able to get "more and more new VIP players". In the past qtr, we have finally seen a recovery (for both operators) and guess is SG gaming mkt could have hit a bottom, who upgraded house rating rating on Genting SP to "buy" from "neutral" on Friday. Genting said it was comfortable with the amount of credit it had extended, but Sands called SG "the most challenging credit market" for collecting on debt, which suggests the Co’s could face bigger write-offs in the coming qtrs. Genting is stockpiling cash as it looks for regional acquisitions. Japan is high on its wish list if gambling is approved there, as many analysts expect. Genting, however, said it does not expect any significant spending in Japan for at least two yrs. With most of the outlays to develop its SG resort - including a marine life park, an amusement park and high-end hotels - largely done, its cash pile will likely continue to increase.