Brokers' take

Genting Singapore | Hold

Feb 25 close: S$0.98

Target price: S$1.03

OCBC Investment Research, Feb 25

Genting Singapore reported a poorer-than-expected set of Q4 FY14 results last night, hit by the slide in China inbound visitors as well as a lower-than-expected win rate. Thus, FY14 revenue grew just one per cent to S$2,862.5 million, about 5 per cent below our forecast, while reported net profit after tax (Npat) slipped 12 per cent to S$517.3 million, or nearly 10 per cent below our estimate.

Going forward, Genting Singapore expects its VIP business to remain weak, with potential for more bad debt provisions in the near term; but will focus more on the mass premium market to help make up the numbers. A potential boost could come in June 2015 with the opening of its 550-room hotel in Jurong; this could bring an additional 1,500 daily visitors to its integrated resort this year. Nevertheless, we opt to pare our FY15 estimates for revenue by 12 per cent and Npat by 23 per cent, preferring to err on the side of caution. Having said that, our discounted cash flow-based fair value improves slightly from S$1.01 to S$1.03 as we include some contribution from its Jeju integrated resort from FY17 …