Genting SP

Genting SP: According to Bloomberg, bearish bets on Genting Singapore (GENS) rose to its highest level in a year, with data from Markit Group revealing that short interest on the counter rose to 2.2% of free float at the end of last week, representing its highest ratio since Jul ’13. GENS shares are down 11% since the group reported its 2Q results in Aug. In an interview with Samsung Asean Equity Fund, the fund guides that given the recent wave of earnings downgrade, it could still be too early to buy into the stock, adding that GENS trades at a 20% premium to Singapore’s stock market, giving leeway for further downside. The fund which has outperformed 96% of its peers over the last five years disclosed that it had sold GENS after its 2Q results, and would consider buying it back should its shares fall to around the $1.00 mark. Separately, GENS expansion plans to develop a US$2.2b casino in South Korea's Jeju Island, has run into delays, pending review by the new local governor, which may take at least six months to a year. Furthermore, the highly anticipated gaming venture in Japan is still a long way off with a host of licensing and regulatory hurdles (location, corporate structure, tax issue, social curbs) yet to be ironed out. Even if GENS manages to obtain the gaming license against the other big boys, operations are expected to only commence in 2020 at the earliest. Going forward, Maybank-KE expects the next few quarters to remain weak, particularly if GENS cuts back on credit to Chinese VIPs, and ends up ceding volume share to Marina Bay Sands. Overall, the street has 13 Buy, 7 Hold and 3 sell rating on GENS with a consensus TP of $1.42.