CIMB

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S$1.10 @26/01/10 A sneak peek into Singapore's first IR Target: S$1.50 Gaming

GENS SP / GENS.SI Soh May Yee +60 (3) 2084 9964 – mayyee.soh@cimb.com

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generally impressed – i) The four hotels will cater to different customer segments; ii)

USS will be a major attraction and iii) the casino is well designed to target the typical

Asian punters. Although not entirely unexpected, we were slightly disappointed that

there was no greater clarity on the opening dates for USS and the casino. But our

observations support our earlier view that a pre-CNY opening is possible. No change

to our FY09-11 core earnings estimates and SOP-based TP of S$1.50. Reiterate

TRADING BUY with near-term catalysts still being positive RWS-related newsflows.Reiterate TRADING BUY. We came away from our half-day tour of RWS feeling

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the four hotels will appeal to different segments. USS will be a major attraction at

RWS. Singapore’s hot weather could be a dampening factor but we believe that

USS’s wide variety of attractions will more than offset the possible weather

inconvenience. We were also impressed by the facade, layout and feel of RWS’s

casino floors which clearly suggested an Asian-centric customer focus.A generally impressive tour. We like the design of the hotel rooms and believe that

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events have been booked so far and ii) the strong interests shown by junkets to

operate at RWS. While not entirely a surprise, we are positive that RWS will be

sharing RWG’s Worldcard membership database as one of its yield-driven marketing

tool. A new revelation was ticket pricing for USS’s annual and Superstar passes.Other notable takeaways. We were positively surprised that i) more than 60 MICE

Financial summary

FYE Dec 2007 2008 2009F 2010F 2011F

Revenue (S$ m) 751.7 643.8 533.9 2,940.8 3,568.1

EBITDA (S$ m) 88.2 13.9 (213.7) 733.2 959.1

EBITDA margins (%) 11.7% 2.2% (40.0%) 24.9% 26.9%

Pretax profit (S$ m) (456.6) (689.5) (313.0) 416.6 513.6

Net profit (S$ m) (416.5) (665.8) (276.6) 359.0 441.0

EPS (S cts) (5.5) (6.9) (2.7) 3.1 3.8

EPS growth (%) (628.5%) (25.0%) 60.5% 213.4% 22.9%

P/E (x) nm nm nm 35.5 28.9

Core EPS (S cts) 0.1 (0.6) (2.7) 3.1 3.8

Core EPS growth (%) (91.5%) (578.6%) (359.4%) 213.4% 22.9%

Core P/E (x) 885.3 nm nm 35.5 28.9

FD core EPS (S cts) 0.1 (0.4) (2.5) 3.0 3.7

FD core P/E (x) 885.3 nm nm 36.8 30.0

Gross DPS (S cts) 0.0 0.0 0.0 0.0 0.0

Dividend yield (%) 0.0% 0.0% 0.0% 0.0% 0.0%

P/BV (x) 3.1 3.9 3.1 2.9 2.6

ROE (%) (17.6%) (21.7%) (8.1%) 8.5% 9.5%

Net gearing (%) N/A 9.2% 1.6% 25.2% 22.5%

Net cash per share (S$) 0.06 N/A N/A N/A N/A

P/FCFE (x) (9.2) (15.6) (23.3) 28.3 (140.8)

EV/EBITDA (x) 87.1 780.6 (52.4) 18.9 14.4

% change in EPS estimates - - -

CIMB/Consensus (x) 1.09 1.55 0.98

Source: Company, CIMB-GK Research, Bloomberg

Price chart Market capitalisation & share price info

Market cap S$12,946m/US$9,222m Share price perf. (%) 1M 3M 12M

12-mth price range S$1.30/S$0.40 Relative (2.6) (0.6) 64.4

3-mth avg daily volume 73.1m Absolute (6.0) 2.8 167.4

# of shares (m) 11,769 Major shareholders % held

Est. free float (%) 25.0 Genting Bhd 53.9

Source: Bloomberg Source: Company, CIMB-GK Research, Bloomberg