News    Genting Malaysia Bhd (GENM) announced yesterday that it had launched the Resort World Bimini (RWB) in the Bahamas and a brand new Bimini SuperFast  cruise ship that will sail the round-trip between Miami and Bimini twice daily.

The RWB is a partnership project between GENM and the resort developer, RAV Bahamas Ltd. The resort is located less than 50 nautical miles or two hours away from Miami.

The German-built ship is a 32,000-ton cruise ship which features gaming onboard with six restaurants and bars as well as the largest party deck in Florida.

Comments    An online search reveals that RWB has 15 tables, 153 slot machines, sports book and sports bar. The resort also features more than 250 townhouses and villas, five F&B venues and the largest marina in the Bahamas.

The cost of the resort is unknown but the luxury boutique casino will cost c.USD24m. It was also reported that the group is making an investment of USD100m in the ship and a jet aircraft to provide daily sea and air transportation between Miami and Bimini.

Although the investment is relatively small (assuming USD124m) as GENM’s total assets are at RM17.6b (@ Mar-13), this venture provides a good avenue to bring visitors from Miami to Bimini since it is the nearest to Miami among the Bahamas islands.

This also offers an alternative to Miami since the outcome of the liberalisation of casino license in the Florida State is still unclear.

Overall, we are neutral on the venture as the earnings impact to GENM is unlikely to be significant. 

Outlook    It is still too early to gauge the earnings accretion to the group. 

GENM’s 2Q13 earnings should be seasonally weaker than 1Q13 as the latter has the boost of the CNY festival.

Forecast    No changes to our FY13-FY15 estimates

Rating   Maintain OUTPERFORM

Valuation    Our price target is maintained at RM4.39/SOP share.

Risks     Unfavourable luck factor. 

Source: Kenanga