Friday, September 17, 2010

Genting Spore

Genting Spore flat at $2.03, pausing for breather after setting record $2.06 high in early trade on continued gaming play over Resorts World Sentosa. Despite recent rally, OSK, which has Buy call with $2.65 target, believes the stock could still head higher, backed by stronger-than-expected margins & gaming volume growth as market is underestimating RWS sustainable EBITDA run rates.

The duopoly market environment & low gaming tax rates would enable the group to boost margins from future operating leverage gains. Sentiment could also be buoyed going into quarter end as the F1 entourage and VVIPs jets in for the event followed by China's Golden Week holidays, which is expected to bring in the Chinese tourist hordes as Philippines' woes could be S'pore boon.

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