News  Yesterday, GENTING unveiled details for the ResortsWorld Las Vegas (RWLV) where the USD4b project is to be developed in phases with ground breaking in 2H14 and will take 24-36 months to complete. It presented the plans at a hearing held by the Nevada Gaming Control Board.

 The development will initially consist of a gaming floor of more than 100,000 sq ft, a hotel tower, a retail village and a showroom. The Phase 1 amenities will also include: (i) >3,500 slots and table games combined, (ii) >3,000 keys, (iii) 22 villas, (iv) >15 retail venues, (v) >30 F&B outlets, (vi) an aquarium, (vii) a central bar featuring live entertainment, and (viii) an observation deck with view down the strip.

 In subsequent phases, RWLV will add: (i) three new hotel towers, (ii) a new, still-to-be-determined, largescale attraction, (iii) a smaller theatre with seating capacity for c.1,000-1,500 people, (iv) a c.1m sq ft convention centre, (v) a water park, (vi) a movie theatre, and (vii) a bowling alley.

Comments  This is the first-time GENTING is unveiling its RWLV plan since the announcement to acquire the Echelon site from Boyd Gaming Corp for USD350m in early Mar- 13. (please refer to our update on GENTING on 05 Mar- 13) GENTING has doubled its investment in this project from USD2b when it was announced last year.

 Although it is too early to gauge the earnings accretion to the group, we remain positive on this venture as it enrichs the earnings base. Its status as a casino operator in Las Vegas should help its branding to compete with other international operators in new markets.

 For now, this project is still parked under GENTING which is consistent with management’s indication instead of placed under GENM (MP; TP: RM4.39). However, we prefer for this project to be parked under GENM’s stable given the latter’s involvement in North American operations.

Outlook  It is still too early to gauge the earnings accretion as Las Vegas casinos have yet to recover from a deep downturn. 2013 gaming revenue in Las Vegas Strip grew 4.8% YoY to USD6.50b and is still 4.7% down from the 2007 glory days levels of USD6.83b. However, with its Asian background, GENTING may be able to attract Chinese gamblers to this new casino resort.

Forecast  No changes to our FY14-FY15 estimates for now.

Rating Maintain OUTPERFORM

Valuation  We are keeping our price target for GENTING unchanged at RM12.81/share, based on a 20% discount to its SoP, pending the release of its 4Q13 results this month-end.

Risks to Our Call Poor luck factor.

 A sustained decline in CPO prices.

Source: Kenanga