-  Maintain HOLD on Genting Malaysia Bhd (GenM) with an unchanged RNAV-based fair value of RM4.30/share. GenM is currently trading at FY14F PE of 17.1x and FY15F PE of 15.3x.

-  GenM’s 1QFY14 core net profit was below our expectations and consensus estimates due to a higherthan- expected effective tax rate. This came in at 24.5% in 1QFY14 versus our assumption of 12% for the full year. We have cut GenM’s FY14F earnings forecast by 14.5% to account for this.

-  GenM’s EBITDA grew 16.2% YoY to RM602.6mil in 1QFY14. This was driven by the absence of the donation expense, which occurred in Malaysia last year and a 216.6% jump in the earnings of the UK division, which resulted from a recovery in bad debts. The donation expense was estimated between RM85mil and RM90mil in 1QFY13.

-  GenM’s casinos in London recorded a 63% YoY surge in revenue in 1QFY14 underpinned by improved volume of business and win percentage. Attendances at the casinos in London expanded by 7% YoY in 1QFY14.

-  RWNY (Resorts World New York) recorded an EBITDA of RM56.3mil in 1QFY14 compared with RM80.8mil in 1QFY13. RWNY was affected by higher payroll costs in 1QFY4. RWNY’s average win per machine rose from US$416/day in 1QFY13 to US$432/day in 1QFY14.

-  In Malaysia, GenM was dragged by the closure of the outdoor theme park. As a result, the number of visitors fell by 15% from 5.3mil in 1QFY13 to 4.5mil in 1QFY14.

-  Excluding the donation expense in 1QFY13, we reckon that EBITDA of the leisure and hospitality division in Malaysia would have inched up by 3% YoY to RM502.6mil in 1QFY14. EBITDA margin of the division would have remained flat at 36% in 1QFY14.

-  “Resorts World Genting”’s casino revenue was up by a single-digit percentage YoY in 1QFY14. Volume of VIP business in Malaysia rose by a single-digit percentage while volume of business in the mass market segment fell by a low single-digit percentage. Casino patronage declined by 5% YoY in 1QFY14.

-  VIPs accounted for 39% of gaming revenue in 1QFY14 versus 37% in 1QFY13.

-  Losses at “Resorts World Bimini” declined from RM69mil in 4QFY13 to RM51.7mil in 1QFY14. Losses are expected to narrow further in the coming financial quarters due to the opening of the jetty in 2HFY14 and streamlining of operations.

Source: AmeSecurities