Genting S’pore weaker results weigh on Genting Bhd

KUALA LUMPUR: Shares of Genting Bhd fell to a low of RM10.32 on Friday after its subsidiary Genting Singapore reported a poor set of results for the first quarter ended March 31, 2013.
At 9.52am, Genting was down 12 sen to RM10.38. There were 309,900 shares done at prices ranging from RM10.32 to RM10.50.
Overall market sentiment was also cautious ahead of the weekend while Malaysians go to the polls on Sunday.
The
FBM KLCI fell 5.8 points to 1,707.66. Turnover was 93.05 million shares
valued at RM152.33mil. Declining stocks beat advancers 229 to 97 while
202 counters were unchanged.
Reuters reported Genting
Singapore's January-March adjusted earnings before interest, tax,
depreciation and amortisation (EBITDA) fell to S$249.7mil from
S$381.4mil a year ago. Five analysts polled by Reuters had on average
expected a profit of S$359mil.
Maybank Kim Eng Research
said Genting Singapore's poor results were due to a low VIP win rate of
2.12%. Although VIP volume surged 38% on-year, they did not expect this
momentum to last.
"We raise our earnings estimates by 2-3% on a
higher FY13 VIP volume growth forecast of 20% (10% previously) and
enterprise value/ earnings before interest, tax, depreciation and
amortisation (EV/EBITDA) based target price by 2% to S$1.70 but with
only 6% upside, we downgrade Genting Singapore from Buy to Hold.
"At
12.7 times one-year forward EV/EBITDA, Genting Singapore is on par with
mean valuations of the Macau casino sector," said Maybank Research.