Genting’s 1HFY13 core earnings, due to be released by month-end, will likely  fall  short  of  our  expectations  due  to  continued  weakness  in  its Singapore VIP operation. We reduce our core earnings estimates by 5.1-7.5%  for  FY13-FY15  following  our  earnings  revision  at  Genting Singapore.  Maintain  NEUTRAL,  with  our  SOP-based  FV  now  lower  at MYR10.35 (from MYR10.66).

- 1HFY13  earnings  likely  to  come  in  within  MYR930m-990m.  Taking the  cue  from  52%-owned  Genting  Singapore’s  (NEUTRAL,  GENS  SP, TP:  SGD1.38)  weaker-than-expected  1HFY13  results,  we  believe  that Genting’s 1HFY13 core earnings are likely to disappoint, as the group’s Singapore operation typically contributes 45-50% of its bottomline. Thus, we  see  Genting’s 1HFY13  core  earnings  hovering  at  MYR930m-990m, vis-à-vis  our  previous  FY13  projection  of  MYR2.19bn.  This  aside,  we 
expect the company to declare an interim DPS of 3-4 sen.   

- Updates  on  Miami.  Genting  recently  secured  a  permit  to  demolish  the former Miami Herald site in Miami, Florida. We expect demolition works to  commence  in  4QFY13.  Given  the  lack  of  progress  on  proposals  to legislate  gaming  in  the  state,  we  believe  management  will,  for  the  time being,  focus  on  developing  the  proposed  mixed  development.  This  will comprise  condominiums,  a  hotel,  waterfront  restaurants,  as  well  as related amenities on the five-acre site along Biscayne Bay.

- Making  headway  in  Upstate  New  York?  New  York  Governor  Andrew Cuomo  recently  signed  the  Upstate  New  York  Gaming  Economic Development  Act,  which  will allow  four  gaming  resorts  to be  built  in  the area. Should voters approve the ballot referendum come November, we expect  Genting  to  capitalise  on  this  opportunity  by  submitting  a  formal application via its Malaysia unit.    

- Maintain  NEUTRAL.  Following  our  earnings  downgrade  on  its Singapore operation, we are trimming Genting’s net profit estimates by 5.1-7.5% for FY13-FY15F. Maintain NEUTRAL, with our SOP-based FV tweaked  marginally  lower  to  MYR10.35  (from  MYR10.66  previously),  to incorporate our new FV for Genting Singapore. 

Source: RHB