News  This morning, the Selection of The New York Gaming Facility Location Board named three developers for new casino licenses. The winners include Genting group’s Lim family controlled

Nasdaq-listed Empire Resorts Inc to build a USD630m casino property, to be known as Montreign Resort Casino in the Town of Thompson in Sullivan County.

 The other two winners are (i) a combined investment of USD450m Rivers Casino & Resort at Mohawk Harbour in the City of Schenectady by Capital Region Gaming LLC; and, (ii) USD425m Lago Resort & Casino in the Town of Tyre by Lago Resort & Casino LLC

 However, the Board had decided not to award any license in the Orange County in which GENM’s indirect subsidiary, RW Orange County LLC had proposed to build two casinos, one in Tuxedo and another one in Montgomery, both in Orange Country. The reason of not to award any license in Orange Country was partly due to it would hurt gambling sites which already built close to the New York City.

Comments  This piece of news does not do well to GENM at the time when sentiment of share price already hurt by overall bad market sentiment. As such, it may negatively impact price movement in the immediate term, albeit no changes in fundamental.

 Nonetheless, its existing racino facility at Aqueduct in the New York City should give them a platform for future venture in the New York State or other part of US should opportunity arises.

Outlook  The RM5b 10-year refurbishment program will be a structural change to its home turf

operations and act as earnings catalyst from 2016 onwards. On the other hand, the yield management initiative should help to improve earnings while the RWNYC numbers should be sustainable. However, the UK operations could continue to see tougher times due to its VIPcentric nature.

Forecast  We are keeping our FY14-FY15 estimates unchanged for now.

Rating Maintain MARKET PERFORM

Valuation  Target price maintained at RM4.30/SoP share.

Risks to Our Call  Unfavourable luck factor.

Source: Kenanga