Friday, August 26, 2011

Maybank IB Research downgrades Genting to Hold

KUALA LUMPUR: Maybank Investment Bank Bhd Research has downgraded GENTING BHD [] to Hold from Buy previously, and cut its target price for the stock to RM10.20 from RM12.76, and said Genting's 1H11 results were largely within expectations.

It said in a note Aug 26 that Genting's 2Q11 core net profit of RM634 million (-19% y-o-y, - 26% q-o-q) brought 1H11 core net profit to RM1.5 billion (+21% y-o-y) which was within expectation at 47% of its full year estimate.

The research house said that excluding Resorts World New York (RWNY) development revenue, 1H11 revenue of RM8.7 billion (+21% y-o-y) was also within expectations at 48% of its 2011 estimate.

The interim dividend per share of 3.5 sen less tax (1H10: 3.3 sen less tax) was also within expectations, it said.

Maybank IB Research said weaker earnings year-on-year were due to poor VIP win rate at 52% owned Resorts World Sentosa (RWS) and 49% owned Genting UK (GENUK).

'We trim our earnings estimates by 6%-9% on lower share of Singaporean VIP volume for RWS.

'Volatile equity markets do not favour this high beta stock. Its share price will also be affected by sentiment at Genting Singapore,' it said.

No comments:

Post a Comment