The group's FY11 earnings  were in line with bothconsensus and our  full-year estimates,representing 98.9% and 99.9% of consensus and our full-year forecasts.Incorporating our recent fair value downgrade on Genting Singapore, we arerevising downwards our earnings and SOP fair value for Genting Bhd from RM13.36to RM12.30. Despite the recent earnings letdown from subsidiary Genting Singapore,we think that this has largely been priced into the group's relatively attractive13.1x FY12 PER  vs  its large-scale global casino peers' morethan 20x PER. Maintain BUY, at a SOP fair value of RM12.30.

In line. GentingBhd's FY11 core earnings were in line, representing 98.9% and 99.9% of consensusand our full-year forecasts respectively. Core earnings, EBITDA and revenue acceleratedby 12.4%, 13.5% and 28.9% y-o-y respectively in FY11, with Genting Singaporebeing the single largest contributor at 69.7% of absolute y-o-y EBITDA growth. Thegroup's q-o-q performance was more subdued, with EBITDA up  3.9% as the lower plantation earnings (-13%q-o-q) and construction cost overruns from Resorts World at New York partiallyoffset its gaming division's 4% sequential earnings growth, which was largelydriven by stronger luck factor at Genting Singapore.

Broad based y-o-ygrowth in most segments. The key drivers of FY11's y-o-y earnings growthwere: i) Genting Singapore: (+19% y-o-y and 4% q-o-q) on the back of a fullFY11 contribution vs 10.5 months' contribution in the previous correspondingperiod and a sequential recovery in win rates; ii) Genting Plantation: (+37%y-o-y but  -20% q-o-q) in tandem withstrong FFB production growth and higher average y-o-y CPO prices but lowerq-o-q, iii) Malaysian gaming op (+7% y-o-y), boosted by improved win rates and doubledigit growth in both mass and VIP gaming volume; and iv)  power division: (+16% y-o-y and +3%q-o-q),  as  more power was  dispatched from its Chinapower plant, and tariff adjustments. The oil and gas division continued toreport a loss of RM66.9m.

Leisure, gamingcontribute 85% of group EBITDA. Leisure and gaming remained the largestcontributor  of  group earnings, with expectations of moregrowth following the completion of Genting Singapore's Resorts World atSentosa's Western Zone by mid-2012 and a full-year maiden contribution fromGenting Malaysia's Resorts World New York racino in 2012. Given the group'sgross cash pile of RM13.2bn (with net cash of RM930m), expanding globalfootprint and hence branding, it is well placed to capitalize on casinoacquisitions or liberalization opportunities globally.

Source: OSK188