KUCHING: Genting Bhd (Genting) is bound to enjoy the spill over of the strong short-term interest in Genting Singapore following the novelty of Resorts World Sentosa and Singapore’s strategist’s expectations of a bullish first quarter of the current financial year.CIMB Research Sdn Bhd (CIMB) said, Genting Singapore’s proposition which combined scarcity, novelty, first-mover advantage and potentially explosive earnings growth, should sustain short-term interest in the stock amidst positive news flow and milestones.
CIMB asserted that the novelty of Genting Singapore’s Resorts World Sentosa (RWS) would not wear off even after welcoming the first customers to its hotels next week. The integrated resort is set for a good debut supported by gradual ramp-up of its operations. The debut is expected to spur interest in the stock
According to the report, RWS would commence on Jan 20 staring with four hotels. But the opening of Universal Studios Singapore (USS) and the casino will be announced after necessary approvals have been obtained. CIMB noted that temporary occupation permits for the two have been received, making them ready for operations.
The research house further said it did not expect a significant interval between the opening dates of USS and casino, placing them before Chinese New Year when gambling activities reach fever-pitch. In addition, the report noted the marketing side of the phased opening as a marketing tool for creating excitement and buzz.
The bullish first quarter of the current financial year together with Singapore economy’s expectation of rebounding strongly with a 6.5 per cent growth combined with consumer sentiment running fairly high, Genting was expected to gain much from all these.
With Marina Bay Sands opening in April this year, Resorts World Sentosa still remained the only integrated resort in Singapore for at least the first quarter.
CIMB maintained its core earnings estimates for Genting but raised its target price from RM9.70 to RM10.0 after updating their Stock Option Plan (SOP) value with higher price for Genting Singapore.