Genting SP

Genting SP: 3Q13 results broadly in line with street expectations, as recovery in VIP segment offset a weaker mass market. Net profit of $193m jumped 75% y/y, and adjusted EBITDA of $347m rose 15% y/y and 12% q/q, driven by: i) strong recovery in VIP rolling chip volumes (+58% y/y, +19% q/q), and ii) VIP win rates normalizing to ~2.9% to 3% levels. The mass market however, was surprising sluggish, likely due to the initial adjustment to a tighter local regulatory environment. As a result, mass table gross gaming revenue declined 10% y/y and the slots by 5%. With Spore’s gaming market maturing, analysts note that key upside catalysts for GENS lie in a sharp upswing in VIP volumes/ win rate (difficult to forecast), or a deployment of its substantial cash balance in overseas ventures like Japan, which GENS is optimistic that the legislative passage of the IR Execution Law could take place by 1Q14. Latest broker ratings as follows: MBKE: Hold, TP $1.43 Nomura: Neutral, TP $1.52 DB: Buy, TP: $1.63 CLSA: U/PF, TP: $1.52 UOB: Hold, TP: $1.42 JP Morgan: Underweight, TP: 1.28 DBSV: Hold. TP: $1.42 UBS: Buy, TP: $1.69