Genting Malaysia (GENM) announced that its casino in Bahamas known as Resorts World Bimini (RWB) is now officially launched. This could in the  near  term  help  mitigate  the  current  deadlock  in  its  proposed development  of  an  integrated  resort  in  Miami.  That  said,  we  maintain our  NEUTRAL  call  with  our  FV  unchanged  at  MYR3.97,  as  we  await more  concrete  developments  on  the  potential  passing  of  the  new Florida gaming law to allow for the setup of destination casinos.

- Briefly  on  RWB.    RWB  is  essentially  a  partnership  between  Genting Malaysia and RAV Bahamas Ltd. RAV Bahamas is  the developer of the 750-acre  beachfront  resort  in  Bimini  Islands  comprising accommodations,  restaurants,  a  fisherman’s  village  with  shopping  and dining options, as well as the largest marina in Bahamas. 

-  Insignificant  earnings  accretion.  RWB  would  accommodate  20-30 gaming tables and 100 slot machines for a  start.  The development cost of  the  casino  is  expected  to  hover  around  USD100m.  Considering  the size,  we  believe  the  earnings  contribution  from  RWB  is  likely  to  be relatively insignificant for the time being.

-Short-term  measure  to  address  shelved  Miami  plan.  Ultimately,  we believe the launch of RWB could help to mitigate the current deadlock in GENM’s  proposed  development  of  an  integrated  resort  in  Miami. Located two  hours away from the city of Miami, cruise services will be offered twice daily to charter visitors between Miami and Bimini  Islands. Earlier  on,  the  Group  proposed  to  build  a  USD3.8bn  casino-cum-hotel complex  on  its  contiguous  30-acre  site  overlooking  Biscayne  Bay  in Miami. Nonetheless, the plan has  since been shelved as  the  local state lawmakers  have  yet  to  approve  of  the  setup  of  destination  casinos  in Florida. 

- NEUTRAL. While we see some positives in  the  RWB launch  to help tap into the Miami gaming market,  we are maintaining our NEUTRAL call for now,  with  our  FV  unchanged  at  MYR3.97.  W e  believe  the  potential passing  of  the  new  gaming  law  to  allow  for  the  setup  of  destination casinos  in Florida  would be more meaningful for  GENM  to establish its foothold in the Miami gaming market.

Source: RHB