Maintain

BUY

Current Price: S$2.28

Fair Value: S$2.53

Expects 4Q10 to be better.

3Q10 results mostly within expectations.

Singapore (GS) reported its 3Q10 results last evening.

Revenue, which excludes the discontinued UK operations, hit

S$744m versus S$12.1m in 3Q09; it was spot on our S$745m

forecast, driven by Resorts World Sentosa (RWS) which

contributed S$731.8m. 3Q10 EBITDA came in at S$345.6m

(within 3% of our estimate) and was a sharp turnaround from

negative S$21.6m in 3Q09; GS was also able to hold its margin

at a commendable 46.5% (though lower than 51.2% in 1H10),

despite a full quarter of competition from Marina Bay Sands.

Net profit (including discontinued operations) came in at

S$187.8m; core net profit at S$182.1m. For 9M10, revenue

hit S$1964.8m, meeting 77.0% of our FY10 estimate, while

net profit came in at S$565.6m, or 72.0% of our full-year

forecast (both adjusted for discontinued operations).

For the upcoming school holiday

Junkets possible from early 2011.

concurs with market watchers that the Casino Regulatory

Authority (CRA) could issue licenses to junket operators in

early 2011, especially to those already operating in wellregulated

markets such as Australia. As before, we estimate

that the Singapore gaming market should stabilize around S$7b

in 2011, with RWS maintaining a slightly more dominant share

of under 55%. Depending on how many licenses are

subsequently issued, we do see room to revise up our gaming

market estimates.Meanwhile, management

New S$2.53 fair value.

and FY11 estimates. As we are raising our long-term FCF

rate from 2% to 2.5%, this also bumps up our DCF-fair value

from S$2.38 to S$2.53. Maintain

(From OCBC Securities)For now, we are maintaining our FY10BUY.

season, management believes that RWS has the correct

offering to do well, given that it is pitched towards the family

and vacation crowd. As such, it expects the fourth quarter to

perform better than the third, which was also affected by the

"Ghost Month", making it "inauspicious" for some to visit the

casino. Nevertheless, management was also pleased with its

3Q10 showing, noting that its hotel occupancy was 71% with

an average room rate of S$250, as it continued to receive

some 3m visitors to the integrated resort (IR). It adds that

Universal Studios Singapore (USS) has also turned cash

positive, and will gradually increase the current daily capacity

from 8k visitors to 18k by next year. GS acknowledged that

the visitors so far were "low-hanging" fruits plucked from areas

around the region; but with its enlarged marketing program,

management is confident that it can attract visitors from further