Genting Singapore

GENS: CIMB is reassessing Jeju, and believes that securing a casio licence or injecting an existing licence into the Landing- GENS JV could be challenging. CIMB says this is because the 598-acre site that was originally bought by Landing and incjected into the JV has been earmarked for healthcare and education investment, according to the Jeju Development Corporation. CIMB notes that construction work on the US$2.2b JV has already been pushed to July 2014 from the original timeline of June. This happens to coincide with the election of a new governor, which could allow for the redesignation of the land, but CIMB believes NGOs could pose stiff resistance. CIMB guides the worst case scenario is that it will withdraw from JV and the $194m investment written off, and wait for a breakthrough in licensing. CIMB has decided to shave of the implied $0.09 NPV per share from the JV from their RNAV-based TP until a clearer picture on land redesignation is evident. CIMB maintains Add with a lower TP of $1.72 from $1.81