Genting SP: Nomura maintain Reduce with TP $1.41. Note that monthly visitor arrivals to Spore have averaged above 1m, a big contrast to 2010’s tourism monthly statistics where it only breached the 1m mark twice
House believe tourist arrivals to SG could at least hit 13.4m (+14% in 2011F) and see upside surprises to 2011 arrival figures due to seasonality factors. Big jump in Chinese tourists in 2H, avg 183,834 from July to August, 46% higher than 1H’s monthly average of 126,275.
Note that Genting could be a beneficiary of this trend, however, its valuations remain expensive with FY12 EV/EBITDA of 12.6x, at a 43% premium to regional peers. Think its growth prospects are likely to lag those of its Macau peers. Unlike in Macau, the SG govt has no plans to make SG a gambling hub.
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