Genting SP: (S$0.715) Imminent earnings’ downgrades?
A foreign broker highlighted that massive consensus earnings’ downgrades for Genting Singapore are imminent, reiterating its Sell rating and $0.50 TP, a 30% downside from last close.
The house reckons the market has yet to appreciate the receivables provision risk and lackluster mass gaming revenue, and cites that Genting Singapore's upcoming 4Q15 earnings would make up just 49% of the street's full year forecasts.
Recall last week, MBS released a weak set of results which prompted a concerning outlook for the mass gaming segment.
Despite rising tourist arrivals in both Oct and Nov, the mass segment saw a dip in non-rolling chip (-11% y/y), which led to lower assumptions for the segment in the year ahead.
Bad debt provisions are also expected to last until 3Q16, which is not currently reflected in consensus' forecasts.
The house believes that it may still be too early for investors to bottom-fish. Bloomberg consensus has 11 Buy, 6 Hold and 5 Sell ratings on the counter with average TP of $0.82.
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