Genting SP

Genting SP: 1Q12 results neutral to negative. Revenue at $787m, -14% yoy, flat qoq, and adjusted EBITDA of $376m was below consensus est. of $410m. This was despite EBITDA being helped by 3.4% win rate in the VIP segment (industry uses 2.85% assumption). Adjusting for this, EBITDA could have been a lower $330m. In terms of operations, i) VIP trends were stronger, with VIP roll +29% qoq, though VIP GGR grew at a lower 13% qoq due to qoq fall in win rate from 3.9% to 3.4%, ii) Mass volumes rose 3% qoq, Mass GGR +4% qoq, iii) RWS maintained its 48% Spore GGR mkt share, as Mass gains of 47% share (vs 45% qoq) was offset by VIP loss at 48% share (vs 51% qoq). iv) RWS ops EBITDA margin eased to 49.5% vs 51.9% qoq, as the VIP/Mass mix changed. Groups EBITDA margin was 47.8% vs 50.7% due to higher expense. Goldman maintains Buy with TP $2.04. Sees 2012 as a “transitional year”, as mgt continues to guide down on direct credit extension, but remains constructive on new non-gaming revenue streams contributing towards yr end when build-out is completed. BOA-ML maintains Buy with TP $1.85. Credit Suisse maintains Outperform with TP $2.50. UOBK maintains Buy with TP $1.89, recommends accumulating potentially modest sh px weakness, in anticipation of cuts to 2013 consensus forecast. Morgan Stanley keeps at Equalweight. Says with GENS at 11x FY12e EV/EBITDA and 20x FY12e P/E, it is trading at a premium to its Macau peers, yet offers less growth potential, a tighter regulatory environment and paying a lower div yield. Nomura keeps at Reduce with TP $1.42.