Genting SP

Genting SP: Deutsche maintaining its Buy call this morning, but lowering its TP to $1.46. Their TP cut reflects expected lower gaming volume and higher-than-projected bad debt provision. For 2H, DB expects VIP to be weaker given macro concerns, a higher rolling base in 2H13 and World Cup effect in July, while on the mass market, due to GENS lower base in 2H13 and step-up efforts towards attracting quality mass players, the house expect mass GGR to recover into the 2H. Valuations are undemanding though, with Genting trading at 9.1x Fy15 EV/Ebitda, at the lower end of its historical trading band range of 9 to 12x. TP excludes potential upside from regional expansion which we previously estimated to be worth $0.49-0.66/share for Japan IR. Expect the Japan government to pass the IR Promotional Bill before end-2014.