Docstoc

Genm 30.08.12

Document Sample
Genm 30.08.12 Powered By Docstoc
					           KENANGA RESEARCH                                                                                         Results Note
30 August 2012



Genting Malaysia                                                                OUTPERFORM ↔
                                                                                           Price:                    RM3.30
2Q12 in line, all round improvement                                                 Target Price:                    RM4.18              ↔

 Period             2Q12                                                 Share Price Performance
                                                                         4.20

 Actual vs.         The 2Q12 core profit of RM497.8m came in             4.00

 Expectations       within expectations.                                 3.80

                    This brought 1H12 core profit to RM815.8m,           3.60

                    which accounted for 53% of our FY12 full-year        3.40

                    estimate and 51% of the market consensus.            3.20

                                                                         3.00
                                                                           Aug-11    Oct-11   Dec-11      Feb-12   Apr-12   Jun-12    Aug-12
 Dividends          A 3.8 sen GDPS was declared in 2Q12, the same
                    as that of last year.                                KLCI                                                   1,645.58
                                                                         YTD KLCI chg                                              7.5%
                                                                         YTD stock price chg                                     -13.8%
 Key Results        The 2Q12 headline net profit leapt 83% QoQ to
 Highlights         RM495.8m, on a broad base improvement in its
                                                                         Stock Information
                    casino operations, with revenue rising 11%. YoY,
                                                                         Bloomberg Ticker                             GENM MK Equity
                    net profit expanded 58% while revenue gained         Market Cap (RM m)                                  19,588.8
                    38%.                                                 Issued shares                                       5,936.0
                    The home turf casino operations reported an          52-week range (H)                                      4.12
                    adjusted EBTDA which grew 21% QoQ in 2Q12            52-week range (L)                                      3.01
                    on a 7% hike in revenue. This was due to a           3-mth avg daily vol:                              3,595,108
                    higher hold percentage despite a lower business      Free Float                                             46%
                    volume in the VIP market. YoY, its Malaysian         Beta                                                    1.2
                    casino posted an adjusted EBTDA that rose 8%
                    while revenue increased 5%.                          Major Shareholders
                    UK casinos reported strong numbers, especially
                                                                         GENTING BHD                                                 47.1%
                    the London casinos. The 2Q12 adjusted EBITDA
                                                                         INTERNATIONAL VALUE                                          3.8%
                    jumped to RM130.1m from RM34.5m in 1Q12 on
                    higher business volume as revenue rose 38%.          FIRST EAGLE INVESTME                                         3.2%
                    YoY, it turned profitable from the negative
                                                                         Summary Earnings Table
                    adjusted EBITDA of RM7.8m in 2Q11 while
                                                                         FYE Dec (RM m)                 2012E    2013E 2014E
                    revenue surged 153% YoY.
                                                                         Turnover                       8141.7   8381.0   8549.6
                    USA operations achieved good results as its          EBIT                           2053.7   2092.4   2169.3
                    adjusted EBITDA soared to RM60.7m in 2Q12            PBT                            2062.6   2113.4   2215.0
                    from RM1.7m in 1Q12 despite revenue dropping         Net Profit (NP)                1526.3   1563.9   1639.1
                    slightly by 1%. YoY, the adjusted EBITDA             Core Net profit                1526.3   1563.9   1639.1
                    doubled from 2Q11 although its revenue dipped        Consensus (NP)                 1590.9   1738.7   1839.1
                    40% as 2Q11 results included a RM363.1m              Earnings Revision                    -        -        -
                    construction revenue.                                EPS (sen)                         25.8     26.4     27.7
                                                                         EPS growth (%)                    -7.5    -17.6      1.1
                                                                         DPS (sen)                          9.0      9.0      9.0
 Outlook            FY12 will be a stronger year than FY11 as RWG’s
                                                                         NTA/Share (RM)                    1.27     1.47     1.68
                    earnings continue to be resilient with a recovery
                                                                         PER                               12.8     12.5     11.9
                    of its UK operations on hand as well as it getting
                                                                         Price/NTA (x)                      2.6      2.3      2.0
                    a full year earnings contribution from RWNYC.
                                                                         Net Gearing (x)               Net cash Net cash Net cash
                                                                         Dividend Yield (%)                 2.7      2.7      2.7
 Change to          No changes to our FY12-FY14 estimates
 Forecasts

 Rating             MAINTAIN OUTPERFORM                                                                        Teh Kian Yeong
                                                                                                        tehky@kenanga.com.my
                                                                                                              +603 2713 2292
 Valuation          We reiterate our price target of RM4.18/SOP
                    share.

 Risks              Unfavourable luck factor.




PP7004/02/2013(031762)                                                                        KENANGA RESEARCH
Genting Malaysia Berhad                                                                         30 August 2012


 Income Statement

                                     2Q         1Q    Q-o-Q          2Q    Y-o-Y         6M          6M    Y-o-Y
   Y/E : Dec (RM m)              FY12         FY12      Chg       FY11       Chg       FY12       FY11       Chg
   Turnover                    2,119.5      1,903.8     11%     1,532.9      38%     4,023.3    3,218.9      25%
   EBITDA                         768.7       551.5     39%       478.4      61%     1,320.2    1,101.2      20%
   Depreciation                (132.4)      (127.9)      4%      (89.4)      48%     (260.3)    (165.8)      57%
   EBIT                           636.3       423.6     50%       389.1      64%     1,060.0      935.4      13%
   Interest & other incomes         15.2       13.3     14%         20.0    -24%        28.5        36.6    -22%
   Interest expense              (11.0)      (12.4)    -11%        (6.2)     78%      (23.4)     (10.0)     134%
   Associates                        0.0        1.3   -100%        (0.9)   -100%         1.3       (2.8)   -148%
   Exceptional items               (2.0)     (47.3)    -96%         28.4   -107%      (49.3)        24.6   -301%
   Pretax profit                  638.5       378.5     69%       430.3      48%     1,017.0      983.8       3%
   Taxation                    (142.7)      (107.9)     32%     (116.6)      22%     (250.6)    (252.4)      -1%
   Profit after tax               495.8       270.7     83%       313.8      58%       766.5      731.5       5%
   Minority interest                 0.0        0.0     N.A.         0.0     N.A.        0.0         0.0     N.A.
   Net profit                     495.8       270.7     83%       313.8      58%       766.5      731.5       5%
   Core net profit                497.8       318.0     57%       295.9      68%       815.8      697.6      17%
   EPS (sen)                         8.4        4.6     83%          5.3     58%        12.9        12.3      5%
   Core EPS (sen)                    8.4        5.4     57%          5.0     68%        13.7        11.8     17%
   DPS (sen)                         3.8        0.0     N.A.         3.8      0%         3.8         3.8      0%
   NTA/share (RM)                   1.44       1.41      2%         1.44     -1%        1.44        1.44     -1%
   Net Gearing (x)            Net cash     Net cash            Net cash             Net cash   Net cash

   EBITDA margin                  36%         29%                  31%                 33%         34%
   EBIT margin                    30%         22%                  25%                 26%         29%
   Pretax margin                  30%         20%                  28%                 25%         31%
   Effective tax rate             22%         28%                  27%                 25%         26%

 Source: Company



 Segmental Breakdown

   Segmental                        2Q          1Q    Q-o-Q         2Q      Y-o-Y       6M          6M     Q-o-Q
   Breakdown                      FY12        FY12      Chg       FY11       Chg      FY12        FY11       Chg
   Segment revenue:
   LH - Malaysia                1,397.8     1,310.5      7%     1,328.3       5%     2,708.4    2,651.7      2%
        UK                        472.9       343.3     38%       187.1     153%       816.2      533.7     53%
        USA                       216.7       218.4     -1%       363.1     -40%       435.1      627.7    -31%
   Properties                      18.9        18.1      4%         7.7     146%        37.0       13.4    176%
   Investment & others             13.2        13.4     -2%         9.8      34%        26.6       20.1     33%
   Group revenue               2,119.5     1,903.8     11%     1,896.0      12%     4,023.3    3,846.6      5%

   Segment result:
   LH - Malaysia                  560.4       462.0     21%       518.3        8%    1,022.4    1,048.5     -2%
        UK                        130.1        34.5    278%        (7.8)   -1772%      164.6       68.1    142%
        USA                        60.7         1.2   4768%         28.4     113%       61.9       28.4    118%
   Properties                      14.3        14.4      0%          2.6     458%       28.7        6.2    362%
   Investment & others              1.4         1.0     41%          3.2     -57%        2.4        5.5    -57%
   Group EBITDA                  766.9       513.1     49%       544.7       41%    1,280.0    1,156.8     11%

   EBITDA margin:
   LH - Malaysia                   40%         35%                 39%                 38%         40%
        UK                         28%         10%                 -4%                 20%         13%
        USA                        28%          1%                  8%                 14%          5%
   Properties                      76%         79%                 33%                 78%         46%
   Investment & others             10%          7%                 33%                  9%         27%
   Group EBITDA margin            36%         27%                 29%                 32%         30%

 Source: Company




Page 2 of 5                                                                             KENANGA RESEARCH
Genting Malaysia Berhad                                                                                             30 August 2012



 Valuation - New

   (RM’m)                                    EBITDA CY12E                   Value            RM/share                   Valuation Basic
   RWG                                              1,990.9               17,320.7                2.92              8.7x CY13 EV/EBITDA
   Genting HK                                                              1,377.6                0.23      Market value @ 18.44% stake
   Genting UK                                           216.4              1,506.0                0.25              7.0x CY13 EV/EBITDA
   RWNY                                                 230.2              1,802.1                0.30              7.9x CY13 EV/EBITDA
   Wisma Genting                                                             266.9                0.04                   FY11 book value
   Net Cash/(Debt)                                                         2,503.5                0.42
                                                                          24,776.8                4.18
   No of shares                                                            5,931.5
   SOP value per share                                                    RM4.18

 Source: Kenanga Research




 Sector Comparisons
                                                                              Est.
                                                            PER                      His.       His.                      Target
 Company                     Fx       Price                                   Div.                       NP Growth (%)              Rating
                                                            (x)                      ROE       P/BV                        Price
                                                                              Yld.
                                                 CY11      CY12   CY13        (%)    (%)        (x)      CY12     CY12
 Malaysia Gaming
 BJ Toto                    RM        4.41       15.4      14.7   14.4        7.7    77.4       13.0     4.6       2.4     3.88      UP
 MPHB                       RM        3.81       19.4      14.8   13.8        4.5    17.6       12.3     31.3      7.4     4.31      OP
 Genting                    RM        9.02       13.9      12.8   11.7        0.9    15.0       2.5      8.0       9.3     11.35     OP
 Genting Malaysia           RM        3.30       13.8      12.8   12.5        2.4    12.7       1.7      7.6       2.5     4.18      OP
 Simple Average                                  15.6      13.8   13.1

 International
 Casino
 Genting                    RM        9.02       13.9      12.8   11.7        0.9    15.0       2.5       8.0     9.3      11.35     OP
 Genting Malaysia           RM        3.30       13.8      12.8   12.5        2.4    12.7       1.7       7.6     2.5      4.18      OP
 Genting Singapore          SGD       1.36       16.2      20.2   17.7        0.0    18.2       3.0      -19.9    14.6      NR       NR
 Galaxy                     HKD       22.65      31.5      14.8   12.6        0.0    25.7       4.2      112.7    17.4      NR       NR
 Melco Crown                USD       11.99      22.5      18.5   17.2        0.0    10.8       1.8       21.4    7.6       NR       NR
 SJM                        HKD       15.94      16.6      13.6   12.2        0.8    15.9       0.8       22.4    11.2      NR       NR
 Sands China                HKD       28.05      25.6      22.3   150.7       12.7   22.9       4.1      -88.5    48.0      NR       NR
 Wynn Macau                 HKD       18.30      16.0      13.9   12.0        2.6    142.2      25.1      15.3    15.8      NR       NR
 Simple Average                                  19.5      16.1   13.9
 Source: Bloomberg/Kenanga Research




Page 3 of 5                                                                                               KENANGA RESEARCH
 Genting Malaysia Berhad                                                                                                                                                              30 August 2012

Income Statement                                                                                               Financial Data & Ratios
FY Dec (RM m)                    2010A               2011A             2012E           2013E       2014E       FY Dec (RM m)                 2010A            2011A           2012E           2013E           2014E
Revenue                            5333                6657              8142            8381        8550      Growth
EBITDA                             2031                2221              2406            2462        2557      Turnover (%)                        6.8            24.8           22.3              2.9           2.0
Depreciation                       -267                -366              -352            -370        -388      EBITDA (%)                         -0.4             9.4            8.3              2.4           3.9
Operating Profit                   1764                1855              2054            2092        2169      Operating Profit (%)               -0.3             5.2           10.7              1.9           3.7
Other Income                         90                  74                63              70          87      PBT (%)                            -1.9             9.8            8.5              2.5           4.8
Interest Exp                         -5                 -32               -49             -44         -37      Net Profit (%)                     -1.4             2.4            7.5              2.5           4.8
Associate                            -8                  -5                -5              -5          -5      Core Net Profit (%)                -1.4            23.8           -7.5            -17.6           1.1
Exceptional Items                  -109                   9                 0               0           0
PBT                                1731                1901              2063            2113        2215      Profitability (%)
Taxation                           -455                -473              -536            -549        -576      EBITDA Margin                     38.1             33.4           29.5                29.4      29.9
Minority Interest                     0                   0                 0               0           0      Operating Margin                  33.1             27.9           25.2                25.0      25.4
Net Profit                         1277                1428              1526            1564        1639      PBT Margin                        32.5             28.6           25.3                25.2      25.9
Core Net Profit                    1386                1419              1526            1564        1639      Net Margin                        23.9             21.4           18.7                18.7      19.2
                                                                                                               Core Net Margin                   26.0             21.3           18.7                18.7      19.2
Balance Sheet                                                                                                  Effective Tax Rate                26.3             24.9           26.0                26.0      26.0
FY Dec (RM m)                    2010A               2011A             2012E           2013E       2014E       ROA                               10.6              9.0           14.1                 9.3       9.2
Fixed Assets                       4556                4982              5081            5161        5223      ROE                               12.7             12.0           19.2                12.5      11.9
Intangible Assets                  3145                4332              4400            4400        4400
Other FA                           2704                3467              3485            3485        3485      DuPont Analysis
Inventories                          74                  76                94              97          99      Net Margin (%)                    23.9             21.4           18.7                18.7      19.2
Receivables                         413                 549               676             696         710      Assets Turnover (x)               0.36             0.40           0.48                0.47      0.45
Other CA                           1027                 958              1169            1202        1226      Leverage Factor (x)               1.27             1.38           1.42                1.35      1.31
Cash                               2866                2143              2021            2690        3657      ROE (%)                           11.0             12.0           12.8                11.9      11.4
Total Assets                      14784               16507             16925           17731       18799
                                                                                                               Leverage
Payables                            907                1592              1905            1962        1999      Debt/Asset (x)                     0.07             0.11         0.11              0.08          0.07
ST Borrowings                       702                 829               415             207         207      Debt/Equity (x)                    0.09             0.15         0.16              0.11          0.09
Other ST Liability                  216                 195               200             200         200      Net Cash/(Debt)                   2729             1182         1184              1184          2302
LT Borrowings                       346                 971              1471            1263        1056      Net Debt/Equity (x)               -0.24            -0.10        -0.10             -0.10         -0.18
Other LT Liability                 1004                 993              1000            1000        1000
Minorities Int.                       0                   0                 0               0           0      Valuations
Net Assets                       11609               11927             11935           13098       14337       EPS (sen)                         23.4             24.0           25.8                26.4      27.7
                                                                                                               GDPS (sen)                         8.0              8.6            9.0                 9.0       9.0
Share Capital                       592                 592               593             593         593      NTA (RM)                          1.43             1.28           1.27                1.47      1.68
Reserves                          11017               11334             11342           12505       13744      PER (x)                           14.1             13.8           12.8                12.5      11.9
Equity                           11609               11927             11935           13098       14337       Gross Div. Yield (%)               2.4              2.6            2.7                 2.7       2.7
                                                                                                               P/NTA (x)                         2.31             2.57           2.60                2.25      1.97
Cashflow Statement                                                                                             EV/EBITDA (x)                      8.1              9.2            7.6                 7.0       6.3
FY Dec (RM m)                    2010A               2011A             2012E           2013E       2014E
Operating CF                       2241                1907              1191            2413        2323
Investing CF                      -3190               -3136              -650            -650        -650
Financing CF                       -572                 287              -389            -890        -683
Change In Cash                    -1521                -942               151             873         990
Free CF                            -948               -1229               541            1763        1673
Capex                               277                 516               450             450         450

Source: Kenanga Research

Fwd PER Band                                                                                                  Fwd PER Standard Deviation
 6       RM                                                                                                        (x)    FD PER                    Average PER               Fwd average PER +1SD
         PRICE (RM)     10.0 x            12.0 x     14.0 x   16.0 x     18.0 x
                                                                                                              40          Fwd average PER -1SD      Fwd average PER +2SD      Fwd average PER -2SD
 5



 4                                                                                                            30



 3
                                                                                                              20

 2

                                                                                                              10
 1



0                                                                                                              0
Dec-00         Aug-02            Apr-04            Dec-05      Aug-07         Apr-09      Dec-10     Aug-12    Dec-00    Aug-02         Apr-04       Dec-05          Aug-07        Apr-09            Dec-10   Aug-12

Source: Bloomberg, Kenanga Research




Page 4 of 5                                                                                                                                                          KENANGA RESEARCH
Stock Ratings are defined as follows:

Stock Recommendations

OUTPERFORM           :         A particular stock’s Expected Total Return is MORE than 10% (an approximation to the
                               5-year annualised Total Return of FBMKLCI of 10.2%).
MARKET PERFORM :               A particular stock’s Expected Total Return is WITHIN the range of 3% to 10%.
UNDERPERFORM :                 A particular stock’s Expected Total Return is LESS than 3% (an approximation to the
                               12-month Fixed Deposit Rate of 3.15% as a proxy to Risk-Free Rate).


Sector Recommendations***

OVERWEIGHT           :         A particular stock’s Expected Total Return is MORE than 10% (an approximation to the
                               5-year annualised Total Return of FBMKLCI of 10.2%).
NEUTRAL              :         A particular stock’s Expected Total Return is WITHIN the range of 3% to 10%.
UNDERWEIGHT          :         A particular stock’s Expected Total Return is LESS than 3% (an approximation to the
                               12-month Fixed Deposit Rate of 3.15% as a proxy to Risk-Free Rate).

***Sector recommendations are defined based on market capitalisation weighted average expected
total return for stocks under our coverage.




 This document has been prepared for general circulation based on information obtained from sources believed to be reliable but we do not
 make any representations as to its accuracy or completeness. Any recommendation contained in this document does not have regard to
 the specific investment objectives, financial situation and the particular needs of any specific person who may read this document. This
 document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees.
 Kenanga Investment Bank Berhad accepts no liability whatsoever for any direct or consequential loss arising from any use of this document
 or any solicitations of an offer to buy or sell any securities. Kenanga Investment Bank Berhad and its associates, their directors, and/or
 employees may have positions in, and may effect transactions in securities mentioned herein from time to time in the open market or
 otherwise, and may receive brokerage fees or act as principal or agent in dealings with respect to these companies.

 Published and printed by:

 KENANGA INVESTMENT BANK BERHAD (15678-H)
 8th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia                                     Chan Ken Yew
 Telephone: (603) 2166 6822 Facsimile: (603) 2166 6823 Website: www.kenangaresearch.com                                 Associate Director



Page 5 of 5                                                                                                 KENANGA RESEARCH

				
DOCUMENT INFO
Shared By:
Stats:
views:61
posted:9/2/2012
language:Latin
pages:5
Description: http://tradepages.blogspot.com