Genting SP

GENS: 4Q13 results missed on lower win rates and more prudent than usual impairment, which otherwise would have been in-line with the street. Net profit inched higher by 5% y/y (-12% q/q) to $170m, while revenue fell 13% y/y (-10.8% q/q) to 692.9m. Gaming revenue fell 19% y/y to $508.6m despite higher volumes in premium gaming business, due to lower win rates. Mass market share declined to 41% from 47% from a year ago Non-gaming revenue was 12% y/y higher at $183.9m on increased visitation, with average daily visitors exceeding 20,000, while hotels achieved occupancy rate of 92% with RevPAR of $411. Impairment of receivables rose 33% to $57m, more conservative than expected by CS. Adjusted EBITDA for the quarter was $250.3m (-32% y/y, -28% q/q), but normalizing for normal win rates, 4Q13 EBITDA would have been closer to $320m. GENS hopes to secure necessary local approvals to start construction of its Jeju resort in 3Q14. Meanwhile, industry expects the Japanese gaming bill to be passed by DIET this summer. CS cites catalysts as normalizing of win rates and progress in the Japan gaming bill. Final DPS of 1¢ proposed (2012: 1¢ DPS) Latest broker ratings as follows: Maybank KE: Maintains Sell with TP slightly shaved to $1.26, from $1.31 CS: Maintains O/PF with TP cut to $1.70 from $1.75 Deutsche: Maintains Buy with TP $1.53