Singapore Company Guide Genting Singapore
Version12 | Bloomberg: GENS SP | Reuters: GENS.SI Refer to important disclosures at the end of this report
DBS Group Research . Equity 26 Feb 2018
BUY Still holding the winning hand Last Traded Price ( 23 Feb 2018): S$1.30 (STI : 3,533.22) Price Target 12-mth: S$1.49 (15% upside) (Prev S$1.51) Rally not over. We maintain our BUY call on Genting Singapore (GENS) with a revised TP of S$1.49. While GENS’ share price has Analyst rallied by over 45% since our upgrade to BUY in August 2017, Mervin SONG, CFA +65 6682 3715 [email protected] we believe the rally can continue. Our view is underpinned by expected positive newsflow including the continued recovery in What’s New earnings, details of a more efficient capital structure, refresh of • 4Q17 adjusted EBITDA up 9% y-o-y to S$255m, in line Resorts World Sentosa, and bid for a Japanese casino.
with expectations Where we differ – Deserves to trade at average EV/EBITDA • Second consecutive quarterly y-o-y improvement in VIP multiple. While consensus has increased their TP over the past rolling chip volumes offset by lower VIP win rate of few months, the implied EV/EVITDA multiple remains below 2.7% GENS’ average multiple of c.12x. We believe GENS deserves to • Sustained earnings recovery in 2018 trade at its average EV/EBITDA multiple given a sustained
earnings recovery outlook. Furthermore, the reasons why GENS traded below its average multiple, namely elevated bad debts and falling earnings, are no longer present. Price Relative
S$ Relative Index 1.5 211 1.4 Re-rating catalyst. Despite the recent turnaround in profitability, 191 1.3 171 1.2 some investors remain sceptical over the sustainability of GENS’ 1.1 151 1.0 131 0.9 111 earnings recovery. We believe as we progress throughout 2018, 0.8 91 0.7 71 as GENS selectively extends credit to its VIP customers which 0.6 51 Feb-14 Feb-15 Feb-16 Feb-17 Feb-18 should translate to higher y-o-y increase in earnings, this Genting Singapore (LHS) Relative STI (RHS) scepticism should subside, resulting in a further re-rating of GENS’ share price. Forecasts and Valuation FY Dec (S$ m) 2016A 2017A 2018F 2019F Valuation: Revenue 2,228 2,393 2,452 2,566 EBITDA 779 1,151 1,229 1,273 On the back of the Singapore government’s plans to raise the Pre-tax Profit 497 860 965 1,016 GST rate to 9% between 2021-2025 from 7% currently, we Net Profit 266 601 762 803 lowered our DCF-based TP to S$1.49 from S$1.51. Our Net Pft (Pre Ex.) 256 618 762 803 Net Pft Gth (Pre-ex) (%) 10.3 141.8 23.3 5.3 valuation excludes the Japan casino. EPS (S cts) 2.21 4.99 6.33 6.66 EPS Pre Ex. (S cts) 2.12 5.13 6.33 6.66 Key Risks to Our View: EPS Gth Pre Ex (%) 11 142 23 5 Decline in VIP and mass businesses. The key risk to our positive Diluted EPS (S cts) 2.22 4.99 6.33 6.67 view is a slower-than-expected recovery or decline in GENS’ VIP Net DPS (S cts) 3.00 3.50 4.00 4.50 BV Per Share (S cts) 60.1 61.8 65.4 68.9 and mass divisions. PE (X) 58.8 26.1 20.5 19.5 PE Pre Ex. (X) 61.2 25.3 20.5 19.5 At A Glance P/Cash Flow (X) 13.4 12.5 13.7 12.5 Issued Capital (m shrs) 12,039 EV/EBITDA (X) 18.2 11.3 10.2 9.5 Mkt. Cap (S$m/US$m) 15,651 / 11,864 Net Div Yield (%) 2.3 2.7 3.1 3.5 Major Shareholders (%) P/Book Value (X) 2.2 2.1 2.0 1.9 Net Debt/Equity (X) CASH CASH CASH CASH Genting Bhd 52.8 ROAE (%) 3.7 8.2 10.0 9.9 Free Float (%) 47.2 3m Avg. Daily Val (US$m) 23.2 Earnings Rev (%): 3 7 ICB Industry : Consumer Services / Travel & Leisure Consensus EPS (S cts): 6.30 6.50 Other Broker Recs: B: 15 S: 0 H: 7
Source of all data on this page: Company, DBS Bank, Bloomberg Finance L.P
ed: JS / sa:SM, PY, CS Company Guide Genting Singapore
WHAT’S NEW Second consecutive quarterly y-o-y improvement in VIP rolling chip volumes
4Q17 results in line with expectations Progress made for Japan casino with Sentosa redevelopment • GENS continued its recovery in earnings with 4Q17 still under discussions with the authorities adjusted EBITDA and normalised profit (excluding • GENS guided that the Integrated Resort (IR) execution bill exceptional items) up 9% and 44% y-o-y to S$255m and should be introduced in the current Diet session over the S$134m respectively which was in line with expectations. coming month or so. Should be the bill be passed, the bill • The improvement was underpinned by low double digit may still take some time to pass the upper house. y-o-y improvement (estimated to be between 10-13%) in However, GENS remains positive on the potential for VIP rolling chip to c.US$5.5bn (flat q-o-q) up from eventual bidding of an IR in Japan in 2019 with Osaka a c.US$4.8bn in 4Q16. This was partially offset by a VIP location the group is interested in building an IR. win rate of 2.7% which is at the lower end of the 2.7- • Meanwhile, there were no further updates on the 3.0% theoretical range versus 2.8% achieved in 4Q16. potential redevelopment of its Resorts World Sentosa The increase in VIP rolling chip we understand was broad (RWS) property. based with growth from China as well as South East Asian countries. Recovery to continue into 2018 • Combined mass drop and slots handle gross gaming • Heading into 2018, we expect the recovery in earnings to revenue was also reported to be up over 20% y-o-y. continue with adjusted EBITDA rising 7% y-o-y. • GENS earnings was also boosted by a decline in bad Underpinning the sustained recovery is a 10% increase in debts to c.S$5m from S$39m in 4Q16 and S$14m in rolling chip volumes (up from our previously forecast of 3Q17. 7% given a stronger USDSGD exchange rate 1.35 versus • However, GENS adjusted EBITDA was down 20% q-o-q 1.37 previously) as GENS selectively extends credit to its owing to bonuses accrued a year end, higher VIP customers. However, we expect the mass business to commissions and lower VIP win rate (2.7% versus 3.1% remain flat y-o-y. With the increase in earnings, we in 3Q17). expect this to translate to a higher dividend of 4.0 Scts up from 3.5 Scts in FY17. Surprise increase in dividend • For FY19, we expect VIP rolling chip and mass business to • GENS declared a 2.0 Scts final dividend taking full year increase to rise 3% y-o-y. 2017 dividend to 3.5 Scts per share. This is an increase • Based on a slight tweak in our assumptions, we changed from 3.0 Scts in 2016 and previous guidance of our FY18/19F adjusted EBITDA by -1/+2% with our maintaining an annual dividend of 3.0 Scts. FY18/19F normalised profit higher by 3%/7% on reduced • We understand the increase in dividend was based on interest costs due to lower than expected borrowings. the group’s increased confidence in its future cash flows. • We have also lowered our DCF-based TP to S$1.49 from • For 2018 and beyond, GENS was unwilling to provide S$1.51 previously as we imputed higher GST rate from guidance on the potential increase in dividend assuming 2021 onwards given plans by the Singapore government a further increase in earnings ahead. to raise GST rate to 9% between 2021-2025, from 7% previously. Our TP implies a EV/EBITDA multiple of c.12x Strong financial position in line with GENS’s average EV/EBITDA multiple. • GENS remains in a strong financial position with net cash of c.S$2.7bn (c.S$4.0bn of cash and restricted cash less Maintain BUY call with revised TP of S$1.49 gross debt of S$1.2bn) as at 31 December 2017, slightly • With earnings expected to continue to recover in 2018 down from S$3.1bn at end 3Q17 as GENS had redeemed and beyond, we maintain our view that GENS’s share the c.S$500m worth of perpetual securities. price will re-rate to its average EV/EBITDA multiple of c.12x. As highlighted in our previous reports, we believe the reasons for GENS to trade at a discount to its average multiple over the past 2 years, namely rising bad debts and falling earnings, are no longer present.
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Company Guide Genting Singapore
Quarterly / Interim Income Statement (S$m) FY Dec 4Q2016 3Q2017 4Q2017 % chg yoy % chg qoq
Revenue 558 630 580 4.0 (7.9) Cost of Goods Sold (347) (326) (345) (0.4) 6.0 Gross Profit 211 304 235 11.3 (22.8) Other Oper. (Exp)/Inc (50.3) (53.3) (54.0) 7.5 1.4 Operating Profit 161 251 181 12.5 (28.0) Other Non Opg (Exp)/Inc (11.6) (6.7) (14.9) (27.7) 121.4 Associates & JV Inc (4.5) 0.73 0.65 nm (12.0) Net Interest (Exp)/Inc 11.4 10.2 5.14 (54.9) (49.4) Exceptional Gain/(Loss) 66.6 (37.3) (0.9) nm (97.5) Pre-tax Profit 223 218 171 (23.3) (21.6) Tax (33.7) (49.3) (36.8) 9.3 (25.3) Minority Interest (29.7) (24.9) (1.2) 96.0 (95.2) Net Profit 159 144 133 (16.6) (7.6) Net profit bef Except. 92.6 181 134 44.4 (26.1) EBITDA 234 320 255 9.2 (20.3) Margins (%) Gross Margins 37.8 48.3 40.5 Opg Profit Margins 28.8 39.9 31.2 Net Profit Margins 28.5 22.8 22.9
Source of all data: Company, DBS Bank
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Company Guide Genting Singapore
Recovery in Macau’s gross gaming revenue CRITICAL DATA POINTS TO WATCH y-o-y growth Critical Factors 50% 40% Recovery in VIP business. Over the past couple of years, with the 30% 20% Chinese government embarking on an anti-corruption and 10% austerity drive, VIP players have generally shunned casinos 0% -10% across Asia to avoid the scrutiny of government officials. This -20% -30% resulted in VIP gross gaming revenue (GGR) in Macau and -40% Singapore falling 40% and 34% in CY15 and 7% and 27% in -50% -60% CY16 respectively. For GENS, in combination with its greater focus on credit quality, its market share has declined from mid-
50’s in 2014 to mid-30% by end 2016. Nevertheless, with VIP win rate above the normalised range Macau’s GGR on an upward trend since August 2016, we are 3.5% potentially at the start of a recovery. Assuming Singapore follows the trends in Macau with a lag and with management 3.0% now focused on growing its top line, these bode well for GENS's business. With VIP rolling chip volumes bottoming out in 2.5% 2017 (-1% y-o-y) following a c.35% falling 2016, we expect a
10% jump in 2018 before a 3% increase in 2019. 2.0%
Bad debts to remain low. GENS’s de-rating in 2015 and early 1.5% 2016 was partially due to concerns over rising bad debts. 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 However, in FY17, pressure on earnings from bad debts eased VIP win rate Lower bound - 2.7% Upper bound - 3.0% given GENS's more conservative extension of credit to its VIP customers. This can be seen in bad debts falling to S$14-15m Bads debts now under control per quarter during 1Q17-3Q17 and falling further to c.S$4m in 100 25% 90 Bad debts decline further 4Q17 from around S$92m in1Q16. Going forward, we estimate 80 20% GENS’s impairments on receivables to remain low at c.S$14m 70 per quarter. 60 15% 50 40 10% Volatility in regional currencies. In late 2016 and early 2017, the 30 strength of the SGD against other regional currencies such as 20 5% CNY, MYR and IDR was a headwind. This is because China, 10 Malaysia and Indonesia are key markets for GENS. However, this 0 0% 1Q11 4Q11 3Q12 2Q13 1Q14 4Q14 3Q15 2Q16 1Q17 4Q17 headwinds may reappear itself if the recent appreciation of the Impairment loss on receivables % of trade receivables SGD against regional currencies continues. Recent strengthening of SGD a potential near term headwind Steady contribution from the mass business. The market for 20.0% mass players has declined over the last couple of years, with 15.0% mass drop declining from c.US$8.7bn in 2012 to US$6.3bn in 10.0% USD 2017. However, with a projected increase in tourist arrivals in 5.0% and management’s focus on growing the top line rather than 0.0% CNY cost management, we believe the mass business will provide a -5.0% IDR -10.0% steady contribution going forward. We project flattish gross -15.0% gaming revenues for the mass business over 2018 before a 3% -20.0% MYR increase in 2019. -25.0% Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 CNY MYR IDR USD Expansion into Japan. The Japanese recently approved the development of integrated resorts. Should GENS successfully Forward EV/EBITDA chart win the bid for such a project, this will boost the long term (x) 19.5 earnings of the group. 17.5 +2sd: 17.8x 15.5 +1sd: 14.9x 13.5 Avg: 12.1x 11.5 9.5 -1sd: 9.2x 7.5
5.5 -2sd: 6.4x
Jul-2011 Jul-2012 Jul-2013 Jul-2014 Jul-2015 Jul-2016 Jul-2017
Jan-2012 Jan-2013 Jan-2014 Jan-2015 Jan-2016 Jan-2017 Jan-2018 Jan-2011 Source: Company, DBS Bank
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Company Guide Genting Singapore
Leverage & Asset Turnover (x) Balance Sheet: 0.25 0.3 Net cash position. GENS is in a strong financial position, with 0.20 net cash of c.S$2.7bn (S$4.0bn of cash and restricted cash less 0.3 gross debt of S$1.2bn) as at 31 December 2017. With 0.15 operating cashflows of S$800m to S$1.2bn per annum, GENS 0.2 should remain in a healthy financial state. In addition, the 0.10 0.2 strong balance sheet in our view allows GENS to raise sufficient 0.05 debt should it be awarded the right to develop an integrated resort in Japan which could cost US$7-12bn. 0.00 0.1 2015A 2016A 2017A 2018F 2019F Gross Debt to Equity (LHS) Asset Turnover (RHS) Share Price Drivers: Capital Expenditure Sustained recovery ahead. The anti-corruption and austerity S$m measures in China led to a slowdown in the Asian casino 250.0 market in both Macau and Singapore. With the Macau market 200.0 on the path of recovery (GGR rising between 1-29% since 150.0 August 2016 following 29 consecutive months of declines), GENS's successful cost containment initiatives as well as 100.0 projected fall in bad debts following stricter credit criteria for its 50.0 VIP customers, we believe GENS’s earnings are on sustained 0.0 recovery path which should translate to the share price rally 2015A 2016A 2017A 2018F 2019F continuing. Capital Expenditure (-) ROE (%) Moving towards a more efficient capital structure. GENS has 10.0% indicated that it plans to move towards a more efficient capital structure, the first step of which was the announcement that it 8.0% plans to redeem its perpetual securities. We believe GENS will 6.0% eventually gear up its balance sheet to a modest level from a net cash position, which should result in better ROEs, triggering 4.0% a further re-rating of the stock. 2.0%
Key Risks: 0.0% 2015A 2016A 2017A 2018F 2019F Hard landing in China. A hard landing in China would present further downside risk to our earnings estimates as this will Forward PE Band (x) impact the confidence and ability of GENS’s Chinese customers (x) to gamble at its properties. 55.0 +2sd: 55.7x
50.0 Credit risks. GENS extends credit to its VIP customers. In the 45.0 +1sd: 44.7x event it is unable to recover its receivables, GENS may face 40.0 higher levels of bad debts. 35.0 Avg: 33.7x 30.0 25.0 -1sd: 22.7x Competition from other markets. Other markets in Asia 20.0 including Macau and Philippines have been developing new 15.0 -2sd: 11.7x integrated resorts which may compete with GENS for the same 10.0
customers.
Jul-11
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Jan-15
Jan-16 Jan-17 Jan-18 Company Background PB Band (x) Genting Singapore Plc (GENS) operates Resorts World (x) 4.5 Singapore (RWS) which is one of the largest fully integrated 4.0 +2sd: 3.7x resorts in Southeast Asia. RWS consist of convention facilities, 3.5 hotels, food & beverage and retail outlets, Universal Studios 3.0 +1sd: 2.9x 2.5 Singapore and a casino. Avg: 2.2x 2.0 1.5 -1sd: 1.4x 1.0 0.5 -2sd: 0.6x
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Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-11 Source: Company, DBS Bank
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Company Guide Genting Singapore
GENS share price versus Macau GGR y-o-y growth Remarks 50% 1.80 GENS’s share price typically 40% 1.60 tracks the direction of Macau’s GGR performance 30% 1.40
20% 1.20 Following the recovery in 10% the Macau market, GENS’s 1.00 share price also started to 0% 0.80 rebound
-10%
Jul-14
Jul-15
Jul-16
Jul-17
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Oct-14
Oct-15
Oct-16
Oct-17
Apr-14
Apr-15 Apr-16 Apr-17 0.60 -20%
-30% 0.40 -40% 0.20
-50% - Macau GGR y-o-y growth - LHS GENS share price (S$) - RHS
Source: Bloomberg Finance L.P., DICJ, DBS Bank
Gaming peer comp* Closing 12-mth Mkt PE EV/EBITDA Company FYE Curncy Price Rec Target Cap Price US$m FY18F FY19F FY18F FY19F Macau Galaxy Ent Dec HKD 67.60 NR N/A 37,331 25.8 23.4 17.0 15.4 Sands China Dec HKD 44.10 NR N/A 45,517 23.0 20.2 17.0 154 SJM Holdings Dec HKD 7.58 NR N/A 5,482 23.1 23.9 14.3 10.7 Wynn Macau Dec HKD 27.05 NR N/A 17,967 23.4 19.9 15.6 14.0 MGM China Dec HKD 23.30 NR N/A 11,320 31.1 20.3 17.5 13.1
Singapore Genting Singapore Dec SGD 1.30 BUY 1.49 11,865 20.5 20.5 10.2 10.2
* Macau stocks based on consensus estimates with Genting Singapore based on DBS Bank estimates Source: Bloomberg Finance L.P., DBS Bank
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Company Guide Genting Singapore
Income Statement (S$m) FY Dec 2015A 2016A 2017A 2018F 2019F
Revenue 2,401 2,228 2,393 2,452 2,566 Cost of Goods Sold (1,708) (1,539) (1,318) (1,193) (1,256) Gross Profit 693 689 1,075 1,260 1,310 Other Opng (Exp)/Inc (122) (207) (207) (313) (319) Operating Profit 571 482 868 946 991 Other Non Opg (Exp)/Inc (138) (29.3) (29.7) (27.0) (27.0) Associates & JV Inc (3.8) (6.2) 3.39 0.0 0.0 Net Interest (Exp)/Inc 7.15 39.3 35.4 45.9 52.2 Exceptional Gain/(Loss) (157) 10.6 (17.4) 0.0 0.0 Pre-tax Profit 279 497 860 965 1,016 Tax (86.2) (112) (174) (203) (213) Minority Interest (118) (118) (84.6) 0.0 0.0 Preference Dividend 0.0 0.0 0.0 0.0 0.0 Net Profit 75.2 266 601 762 803 Net Profit before Except. 232 256 618 762 803 EBITDA 915 779 1,151 1,229 1,273 Growth Revenue Gth (%) (16.1) (7.2) 7.4 2.5 4.6 EBITDA Gth (%) (21.0) (14.9) 47.8 6.8 3.6 Recovery in FY18-19 earnings Opg Profit Gth (%) (22.7) (15.5) 80.0 9.0 4.7 due to recovery in VIP rolling Net Profit Gth (Pre-ex) (%) (45.4) 10.3 141.8 23.3 5.3 chip volumes, lower bad debts and successful Margins & Ratio reduction in operating Gross Margins (%) 28.8 30.9 44.9 51.4 51.1 expenses Opg Profit Margin (%) 23.8 21.6 36.3 38.6 38.6 Net Profit Margin (%) 3.1 12.0 25.1 31.1 31.3 ROAE (%) 1.0 3.7 8.2 10.0 9.9 ROA (%) 0.6 2.3 5.7 7.8 7.9 ROCE (%) 3.4 3.3 6.9 8.2 8.2 Div Payout Ratio (%) 239.4 135.3 70.1 63.2 67.5 Net Interest Cover (x) NM NM NM NM NM Source: Company, DBS Bank
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Company Guide Genting Singapore
Quarterly / Interim Income Statement (S$m) FY Dec 4Q2016 1Q2017 2Q2017 3Q2017 4Q2017
Revenue 558 587 596 630 580 Cost of Goods Sold (347) (326) (321) (326) (345) Gross Profit 211 261 275 304 235 Other Oper. (Exp)/Inc (50.3) (47.9) (53.8) (53.3) (54.0) Operating Profit 161 213 221 251 181 Other Non Opg (Exp)/Inc (11.6) (6.0) (2.1) (6.7) (14.9) Associates & JV Inc (4.5) 0.93 1.08 0.73 0.65 Net Interest (Exp)/Inc 11.4 10.3 12.3 10.2 5.14 Exceptional Gain/(Loss) 66.6 35.1 (14.3) (37.3) (0.9) Pre-tax Profit 223 253 218 218 171 Tax (33.7) (43.1) (45.2) (49.3) (36.8) Minority Interest (29.7) (29.1) (29.4) (24.9) (1.2) Net Profit 159 181 143 144 133 Net profit bef Except. 92.6 146 158 181 134 EBITDA 234 283 293 320 255
Growth Revenue Gth (%) (4.1) 5.2 1.6 5.7 (7.9) EBITDA Gth (%) 0.0 21.2 3.4 9.3 (20.3) Opg Profit Gth (%) 0.4 32.5 3.8 13.6 (28.0) Net Profit Gth (Pre-ex) (%) (5.6) 57.6 8.0 14.8 (26.1) Margins Gross Margins (%) 37.8 44.5 46.1 48.3 40.5 Opg Profit Margins (%) 28.8 36.3 37.1 39.9 31.2 Net Profit Margins (%) 28.5 30.9 24.0 22.8 22.9
Balance Sheet (S$m) FY Dec 2015A 2016A 2017A 2018F 2019F
Net Fixed Assets 5,487 5,242 5,069 5,010 4,950 Invts in Associates & JVs 130 50.9 54.3 54.3 54.3 Other LT Assets 559 313 345 322 298 Cash & ST Invts 5,002 4,963 3,834 4,292 4,803 Inventory 57.2 61.5 48.6 53.2 56.2 Debtors 646 198 127 134 141 Other Current Assets 145 618 129 129 129 Total Assets 12,027 11,446 9,607 9,994 10,432
ST Debt 167 186 203 203 203 Creditor 412 350 463 413 432 Other Current Liab 67.9 97.4 200 200 200 LT Debt 1,464 978 1,013 1,013 1,013 Other LT Liabilities 290 305 286 286 286 Shareholder’s Equity 9,626 9,530 7,442 7,879 8,298 Minority Interests 0.01 0.00 0.00 0.00 0.00 Total Cap. & Liab. 12,027 11,446 9,607 9,994 10,432
Non-Cash Wkg. Capital 368 431 (358) (296) (306) Net Cash/(Debt) 3,371 3,799 2,618 3,076 3,587 Debtors Turn (avg days) 132.8 69.1 24.8 19.4 19.6 Creditors Turn (avg days) 134.9 112.0 143.3 175.6 158.3 Inventory Turn (avg days) 14.8 17.4 19.4 20.4 20.5 Asset Turnover (x) 0.2 0.2 0.2 0.3 0.3 Current Ratio (x) 9.0 9.2 4.8 5.6 6.1 Quick Ratio (x) 8.7 8.2 4.6 5.4 5.9 Net Debt/Equity (X) CASH CASH CASH CASH CASH Net Debt/Equity ex MI (X) CASH CASH CASH CASH CASH Capex to Debt (%) 10.7 6.0 6.3 16.4 16.4 Z-Score (X) 5.1 6.1 4.1 4.2 4.2
Source: Company, DBS Bank
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Company Guide Genting Singapore
Cash Flow Statement (S$m) FY Dec 2015A 2016A 2017A 2018F 2019F
Pre-Tax Profit 279 497 860 965 1,016 Dep. & Amort. 344 297 283 283 283 Tax Paid (127) (64.4) (78.2) (203) (213) Assoc. & JV Inc/(loss) 3.83 6.23 (3.4) 0.0 0.0 Chg in Wkg.Cap. 267 382 197 (62.2) 9.74 Other Operating CF 774 545 858 1,122 1,174 Net Operating CF 1,262 1,165 1,256 1,140 1,253 Capital Exp.(net) (174) (69.6) (76.1) (200) (200) Other Invts.(net) 0.0 0.0 0.0 0.0 0.0 Redemption of Invts in Assoc. & JV (138) (177) 0.0 0.0 0.0 perpetual securities Div from Assoc & JV 0.0 0.0 0.0 0.0 0.0 Other Investing CF 768 (23.8) 533 0.0 0.0 Net Investing CF 455 (270) 457 (200) (200) Div Paid (121) (360) (361) (482) (542) Chg in Gross Debt (88.8) (475) (195) 0.0 0.0 Capital Issues (112) 0.0 0.0 0.0 0.0 Other Financing CF (136) (145) (2,219) 0.0 0.0 Net Financing CF (458) (980) (2,775) (482) (542) Currency Adjustments 45.1 46.8 (67.5) 0.0 0.0 Chg in Cash 1,305 (38.6) (1,130) 458 511 Opg CFPS (S cts) 8.23 6.51 8.79 9.98 10.3 Free CFPS (S cts) 9.00 9.10 9.79 7.80 8.74 Source: Company, DBS Bank
Target Price & Ratings History
S$ 1.42 12-mth Date of Closing S.No. T arget Rating Report Price Price 1.32 6 1: 17 Mar 17 1.00 1.20 BUY 2: 15 May 17 1.15 1.35 BUY 3: 23 May 17 1.15 1.35 BUY 1.22 4 4: 02 Jun 17 1.18 1.35 BUY 2 5 5: 03 Aug 17 1.20 1.45 BUY 1.12 6: 07 Nov 17 1.27 1.51 BUY 3
1.02
1 0.92 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17
Note : Share price and Target price are adjusted for corporate actions.
Source: DBS Bank Analyst: Mervin SONG, CFA
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Company Guide Genting Singapore
DBS Bank recommendations are based an Absolute Total Return* Rating system, defined as follows: STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) BUY (>15% total return over the next 12 months for small caps, >10% for large caps) HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps) FULLY VALUED (negative total return i.e. > -10% over the next 12 months) SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame) Share price appreciation + dividends
Completed Date: 26 Feb 2018 08:11:14 (SGT) Dissemination Date: 26 Feb 2018 09:03:23 (SGT)
Sources for all charts and tables are DBS Bank unless otherwise specified.
GENERAL DISCLOSURE/DISCLAIMER This report is prepared by DBS Bank Ltd. This report is solely intended for the clients of DBS Bank Ltd, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBS Bank Ltd.
The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS Bank Ltd, its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively, the “DBS Group”) have not conducted due diligence on any of the companies, verified any information or sources or taken into account any other factors which we may consider to be relevant or appropriate in preparing the research. Accordingly, we do not make any representation or warranty as to the accuracy, completeness or correctness of the research set out in this report. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. The DBS Group, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. The DBS Group, may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies.
Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed, it may not contain all material information concerning the company (or companies) referred to in this report and the DBS Group is under no obligation to update the information in this report.
This publication has not been reviewed or authorized by any regulatory authority in Singapore, Hong Kong or elsewhere. There is no planned schedule or frequency for updating research publication relating to any issuer.
The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that:
(a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and (b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments stated therein.
Please contact the primary analyst for valuation methodologies and assumptions associated with the covered companies or price targets. Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report.
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Company Guide Genting Singapore
DBSVUSA, a US-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage in market-making.
ANALYST CERTIFICATION The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is, or will be, directly or indirectly, related to specific recommendations or views expressed in the report. The research analyst (s) primarily responsible for the content of this research report, in part or in whole, certifies that he or his associate1 does not serve as an officer of the issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the real estate investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the management of the issuer or the new listing applicant) and the research analyst(s) primarily responsible for the content of this research report or his associate does not have financial interests2 in relation to an issuer or a new listing applicant that the analyst reviews. DBS Group has procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of research reports. The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment banking function of the DBS Group and procedures are in place to ensure that confidential information held by either the research or investment banking function is handled appropriately. There is no direct link of DBS Group's compensation to any specific investment banking function of the DBS Group.
COMPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBS Bank Ltd, DBS HK, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), DBSV HK or their subsidiaries and/or other affiliates have a proprietary position in Genting Singapore, recommended in this report as of 31 Jan 2018.
2. Neither DBS Bank Ltd, DBS HK nor DBSV HK market makes in equity securities of the issuer(s) or company(ies) mentioned in this Research Report.
Compensation for investment banking services: 3. DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.
Disclosure of previous investment recommendation produced: 4. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates may have published other investment recommendations in respect of the same securities / instruments recommended in this research report during the preceding 12 months. Please contact the primary analyst listed in the first page of this report to view previous investment recommendations published by DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates in the preceding 12 months.
1 An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions or instructions of the analyst. 2 Financial interest is defined as interests that are commonly known financial interest, such as investment in the securities in respect of an issuer or a new listing applicant, or financial accommodation arrangement between the issuer or the new listing applicant and the firm or analysis. This term does not include commercial lending conducted at arm's length, or investments in any collective investment scheme other than an issuer or new listing applicant notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant.
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Company Guide Genting Singapore
RESTRICTIONS ON DISTRIBUTION General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
Australia This report is being distributed in Australia by DBS Bank Ltd. (“DBS”) or DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”). DBS holds Australian Financial Services Licence no. 475946.
DBSVS is exempted from the requirement to hold an Australian Financial Services Licence under the Corporation Act 2001 (“CA”) in respect of financial services provided to the recipients. DBSVS is regulated by the Monetary Authority of Singapore under the laws of Singapore, which differ from Australian laws.
Distribution of this report is intended only for “wholesale investors” within the meaning of the CA.
Hong Kong This report has been prepared by a person(s) who is not licensed by the Hong Kong Securities and Futures Commission to carry on the regulated activity of advising on securities in Hong Kong pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). This report is being distributed in Hong Kong and is attributable to DBS Vickers Hong Kong Limited, a licensed corporation licensed by the Hong Kong Securities and Futures Commission to carry on the regulated activity of advising on securities pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). For any query regarding the materials herein, please contact Paul Yong (CE. No. ASE988) at [email protected].
Indonesia This report is being distributed in Indonesia by PT DBS Vickers Sekuritas Indonesia.
Malaysia This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR"). Recipients of this report, received from ADBSR are to contact the undersigned at 603-2604 3333 in respect of any matters arising from or in connection with this report. In addition to the General Disclosure/Disclaimer found at the preceding page, recipients of this report are advised that ADBSR (the preparer of this report), its holding company Alliance Investment Bank Berhad, their respective connected and associated corporations, affiliates, their directors, officers, employees, agents and parties related or associated with any of them may have positions in, and may effect transactions in the securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory and other services for the subject companies. They may also have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and other services from the subject companies.
Wong Ming Tek, Executive Director, ADBSR
Singapore This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No. 198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from, or in connection with the report.
Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd.
United This report is produced by DBS Bank Ltd which is regulated by the Monetary Authority of Singapore. Kingdom This report is disseminated in the United Kingdom by DBS Vickers Securities (UK) Ltd, ("DBSVUK"). DBSVUK is authorised and regulated by the Financial Conduct Authority in the United Kingdom.
In respect of the United Kingdom, this report is solely intended for the clients of DBSVUK, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVUK. This communication is directed at persons having professional experience in matters relating to investments. Any investment activity following from this communication will only be engaged in with such persons. Persons who do not have professional experience in matters relating to investments should not rely on this communication.
Dubai This research report is being distributed by DBS Bank Ltd., (DIFC Branch) having its office at PO Box 506538, 3rd Floor, International Building 3, East Wing, Gate Precinct, Dubai International Financial Centre (DIFC), Dubai, United Arab Emirates. DBS Bank Financial Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority. This research report is intended only for Centre professional clients (as defined in the DFSA rulebook) and no other person may act upon it.
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Company Guide Genting Singapore
United Arab This report is provided by DBS Bank Ltd (Company Regn. No. 196800306E) which is an Exempt Financial Adviser as defined Emirates in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. This report is for information purposes only and should not be relied upon or acted on by the recipient or considered as a solicitation or inducement to buy or sell any financial product. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situation, or needs of individual clients. You should contact your relationship manager or investment adviser if you need advice on the merits of buying, selling or holding a particular investment. You should note that the information in this report may be out of date and it is not represented or warranted to be accurate, timely or complete. This report or any portion thereof may not be reprinted, sold or redistributed without our written consent.
United States This report was prepared by DBS Bank Ltd. DBSVUSA did not participate in its preparation. The research analyst(s) named on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate.
Other In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, jurisdictions professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.
DBS Regional Research Offices
HONG KONG MALAYSIA SINGAPORE DBS Vickers (Hong Kong) Ltd AllianceDBS Research Sdn Bhd DBS Bank Ltd Contact: Paul Yong Contact: Wong Ming Tek (128540 U) Contact: Janice Chua 18th Floor Man Yee Building 19th Floor, Menara Multi-Purpose, 12 Marina Boulevard, 68 Des Voeux Road Central Capital Square, Marina Bay Financial Centre Tower 3 Central, Hong Kong 8 Jalan Munshi Abdullah 50100 Singapore 018982 Tel: 65 6878 8888 Kuala Lumpur, Malaysia. Tel: 65 6878 8888 Fax: 65 65353 418 Tel.: 603 2604 3333 Fax: 65 65353 418 e-mail: [email protected] Fax: 603 2604 3921 e-mail: [email protected] Participant of the Stock Exchange of Hong Kong e-mail: [email protected] Company Regn. No. 196800306E
INDONESIA THAILAND PT DBS Vickers Sekuritas (Indonesia) DBS Vickers Securities (Thailand) Co Ltd Contact: Maynard Priajaya Arif Contact: Chanpen Sirithanarattanakul DBS Bank Tower 989 Siam Piwat Tower Building, Ciputra World 1, 32/F 9th, 14th-15th Floor Jl. Prof. Dr. Satrio Kav. 3-5 Rama 1 Road, Pathumwan, Jakarta 12940, Indonesia Bangkok Thailand 10330 Tel: 62 21 3003 4900 Tel. 66 2 857 7831 Fax: 6221 3003 4943 Fax: 66 2 658 1269 e-mail: [email protected] e-mail: [email protected] Company Regn. No 0105539127012 Securities and Exchange Commission, Thailand
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