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Genting Singapore Remains Analysts’ Favourite?
Corporate Digest | 14 September 2012
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By: Jade Lee
Articles (97) Profile

Genting Singapore PLC (GS) – to Buy, Hold or Sell? This question has undoubtedly been haunting a lot of investors. As anticipated, GS reported a set of disappointing 2Q12 results that left investors with weakened confidence. This is further exacerbated by the shocking departure of its marketing chief Mabel Lee, spurring worries that its business may be facing more headwinds going forward. All of that said, let us take a quick glance at what the analysts said about GS.

Making reference from Graph 1, GS’ “Sell” calls, for the month of July to September, have increased dramatically from 5 to 16 percent of the total coverage following a slew of negative newsflow. However, there seems to be no shortage of supports as the “Hold” and “Buy” calls each takes up more than 40 percent of the pool, indicating analysts’ positive views on GS for the short to medium term.

Graph 1: Genting Singapore’s Broker Recommendations

Source: FactSet Research System Inc

What Say You Analysts?
A “Buy” call indeed gives GS stock holders much needed confidence given that the stock has fallen off a cliff since its peak of $2.33 in September 2010. Macquarie Equities Research (in a report dated 16 August) upgraded GS from “Neutral” to “Outperform”, saying that GS’ weaker 2Q12 results would start to recover from 4Q12 and could positively surprise investors. Remarkably, it believes the opening of Marine Life Park in 4Q12 could be a price catalyst.

Seconding the view, OCBC (in a report dated 13 August) said it maintains its “Buy” call notwithstanding the view of a more depressed economic outlook. It added that the management said its adjusted EBITDA margin of 45 percent in 2Q12 was the worst and is confident that it will improve by next year, staying between 45 to 50 percent once the West Zone reaches steady state.

In addition, despite the fact that a “Reduce” rating has been recommended by Phillip Securities on GS, the house said a silver lining against the dark cloud could be any noteworthy growth catalyst from GS’ expansion opportunities. It further added that a potential upgrade could be seen if GS could consistently generate more than $800 million in revenue per quarter.

Bottom line: For now, it does seem like it is just a matter of time for Asia’s second largest casino operator to sparkle again.
Jade manages and oversees a portfolio of stocks which are mainly focused on the mining and property sectors at Shares Investment.

Please click here for more information about this author.

Genting Singapore  0.915 +0.005 +0.55%   
Business: Develops, operates & mkts casinos & IRs globally, including Australia, M'sia, Philippines & UK. [FY18 Turnover] Gaming (66.1%), non-gaming (33.8%), others & invs (0.1%).

Insight: May-19, 1Q19, despite Co's non-gaming business reg... Read More
Oversea-Chinese Banking Corp  10.780 +0.04 +0.37%   
Business: [FY18 Turnover] Global corporate/investment banking (35%), global consumer/private banking (34.8%), OCBC Wing Hang (11.5%), insurance (11%), global treasury & mkts (7.7%).

Insight: May-19, 1Q19 total income rose 14.7% driven by str... Read More

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