Monday, March 31, 2014
Genting SP: CIMB maintains Add with $1.81 TP. The house notes that Genting SP (GENS) has announced that the conditions precedent for the JV to develop a US$2.2bn integrated resort (IR) on Jeju Island have been met. This includes government approvals for the venture. Therefore expect some form of official announcement by the Korean government to follow, similar to the Caesar, Lippo and OUE JV in Incheon. The house keep its RNAV-based target price and EPS forecasts, and maintain an Add rating. The key catalyst for GENS’s share price is the utilisation of excess capital on its balance sheet. The Jeju JV is a prelude to the full potential of GENS’s balance sheet, which is expected to be fully unlocked if it does secure a concession in Japan as well.