Friday, September 9, 2011

CIMB Research maintains Outperform on Genting M'sia

KUALA LUMPUR: CIMB Equities Research is maintaining its Outperform call and sum-of-parts based target price of RM4.50 for Genting Malaysia.

It said on Thursday, Sept 8 US lawmakers are reportedly considering whether to allow table games in places like the Saratoga Casino and Raceway in New York.

Currently, table games are only allowed in tribe-operated casinos in New York. While it is still early days, this is good news for Genting New York's Resorts World New York (RWNY) as the net win for table games can be much higher than for slot machines or video lottery terminals (VLT).

'This suggests potential upside to our earnings projections which currently factor in only the VLT operations.

'As Genting Malaysia's overseas operations gain traction, the group's earnings profile will slowly but surely transform. We maintain our OUTPERFORM call and SOP-based target price of RM4.50 for Genting Malaysia,' it said.

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