Genting Malaysia (BUY)

More Surprises Ahead?

'''' RWNY recorded a surprising net wins of US$651/VLT/day on its first day of business on 28^th October 2011. On the following week, it recorded an average net wins of US$629/VLT/day (-3% wow).

'''' The robust net wins/VLT/day implies significant potential upside, as it is 117% above our conservative assumption of US$300 per VLT per day.

'''' Despite some cannibalization, RWNY actually enlarged the overall market size as state wide's net wins improved 23% after the inclusion of RWNY.

'''' If the net wins are able to maintain at current level, there is 12% and 7.4% potential upside to our earnings forecasts and SOP based target price respectively. Recall that ECC only recorded a net win of US$311/VLT/day during its first week of operation in Oct 2006. This underpins our view that RWNY has the potential of overtaking ECC as the market leader.

'''' Forecast remained unchanged, pending more data points on RWNY's net wins. Maintain BUY with target price of RM4.07 based on SOP.

''

IOI Corporation (HOLD)

Resolves land deal termination issue

'''' Both IOI and DutaLand have agreed to revoke the sale and purchase agreement (SPA) to acquire 11,977.9ha of oil palm plantation land in Sabah for RM830m.

'''' OSK Trustees Bhd (the stakeholder jointly appointed by both parties) will refund IOI both the deposit (RM83m, equivalent to 10% of the purchase price) together with the interest accrued.

'''' SOP-derived TP maintained at RM4.57, and our Hold recommendation for IOI maintained.

''

KLCI: Wild swings ahead on worsening external backdrops

'''' In the wake of external wild swings driven by headlines, we reiterate our SELL INTO RALLY recommendation towards stiff resistance 1491-1510 zones. Immediate supports are 10-d SMA (1475) and mid Bollinger band (1458). A breakdown below 1458 will mean that the current rally is likely to be disrupted, spurring more selldown towards 50-d SMA (1434) and lower Bollinger band (1422) pts.

''

PANTECH: Supported by cheap valuations and high DY

'''' PANTECH is consolidating well above the lower Bollinger band (now at RM0.44). Technical indicators are gradually on the mend and upon breakout of its downtrend line resistance at the upper Bollinger band (RM0.49), PANTECH is likely to retake the 30-w SMA (RM0.55), followed by stiffer hurdle near 200-d SMA (RM0.58). Cut loss below RM0.44.