Genting SP

Las Vegas Sands / Genting SP: Marina Bay Sands (MBS) had yet another business-as-usual quarter with both its VIP and mass GGR growth capped by the availability of credit and regulated local access respectively Parent LVS, posted third-quarter profit that beat analysts’ estimates on continued growth in Asia. Profit rose to 82c a share, excluding some items, compared with the 77c average of analysts’ estimates compiled by Bloomberg. Revenue gained 32% to $3.57b. In Singapore, adjusted property EBITDA came in at $373.6m (+43% y/y, -6% q/q) Rolling Chip volume increased 16.9% to reach $13.79b. CIMB expects Genting SP to report similar uninspiring 3Q13 numbers on 7 Nov. Note that Genting SP has rallied recently on the back of its chances in Japan which admittedly are more than good. It has been ahead of the curve in engaging with potential partners and the potential landscape. Overall, CIMB maintains U/p on Genting SP with $1.17 TP. The house believes the Japanese will lean towards the SG IR model, which is capex-heavy and regulation-heavy. Overall, positive on GENS and Japan but would not be over-enthusiastic on the option value. If the Japanese want the same Singapore model, then ROCEs could potentially be low.