Genting SP

Genting SP: OCBC upgraded to Hold rating on valuations grounds, with TP unchanged at $0.95.

House notes that at current levels, most of bad news may have already been priced in. For one, Genting SP has already warned for some time that VIP volumes are likely to remain sluggish in the medium term, as Chinese high rollers are still affected by the ongoing anti-graft campaign in China. It had also warned of further credit tightening for its VIP business and more provisions may be needed as collection of debt from these players are more difficult and could remain challenging to do so.

Meanwhile, OCBC does see some near-term positives on the horizon. Universal Studios Singapore will re-open its main attraction – the Battlestar Galactica ride on 28 May, just in time for the Jun school holidays; this after being closed for nearly two years. In addition, media reports suggest that occupancy rate at its newly-opened Genting Hotel Jurong has been better than expected, even though it has just opened 25% of its 557 rooms in Apr. When fully opened in Jun, GS is hopeful that it can attract as much as 1.5k additional daily visitors to its IR this year.