Genting SP

Genting SP: Marina Bay Sands (MBS) reported adjusted 4Q14 EBITDA (excluding a US$90.1m property tax reassessment) of US$428m (+66% y/y, +22% q/q), with total gross revenue coming in at US$839m (+27% y/y, +14% q/q) Rolling chip gross revenue gained from a more favourable hold rate of 3.58% (4Q13: 1.92%; 3Q14: 2.64%) and jumped to US$360m (+36% y/y, +49% q/q) on rolling chip volumes of US$10.8b (-27% y/y; +10% q/q). The q/q improvement in rolling chip volumes could indicate a bottoming in declining VIP business. Meanwhile, the mass market held steady, with slot handle revenue of US$150m (+2% y/y, -2% q/q) and non-rolling chip revenue of US$293m (+5% y/y, +1% q/q). MBS’ hotel business continued to fare reasonably well, with occupancy rates of 98.3% (+1.4 ppt) and average daily room rates of US$422 (-0.7%). Core adjusted EBITDA margin was at 51.0%. The latest set of data could be a positive read-through for Genting SP (GENS) upcoming 4Q14 results, which could similarly show a q/q improvement in VIP volumes. Meanwhile, some market watchers are optimistic that GENS will be able to exhibit a similar hold rate as MBS, which could allow it to retain its market share of VIP gross gaming revenue. Maybank-KE has a Hold rating on GENS with a TP of $1.13. For the upcoming 4Q14 results, the street is expecting GENS to post revenue of $775m and EBITDA of $352.0m.