KUALA LUMPUR (Feb 15): AmResearch has downgraded Genting Singapore PLC (GenS) to a Sell from Hold previously at S$1.60 with a fair value of S$1.50 following the rise in the company’s share price.
In a note Friday, the research house said it believed that GenS’ share price has been rising on the back of a potential recovery from the increase in VIP casino patronage and volume of business.
“We are forecasting GenS net profit to climb up 17.8% to S$781.5 million in their financial year 2013 (FY13)” it said.
AmResearch expects GenS’ earnings before interest, taxes, depreciation, and amortization (EBITDA) margin to improve from mid-FY13F onwards as it is envisaged to remain flexible from operating expenses relating to the Western Zone.
Meanwhile, Marina Bay Sands (MBS) was reported to have a surge in volume in VIP business from 3QFY3 to 4QFY12 at 39.7%.
“The jump in MBS’ VIP volume of business in 4QFY12 could be due to a few customers generating huge volume of play” said the research house.
It is yet to be seen if GenS would also benefit from the same customers of MBS in their 4QFY12 results as it is scheduled to release on February 21.