Genting Singapore Plc reported second-quarter profit of S$396.5 million (US$291 million) compared with a loss a year earlier as its new casino resort in Singapore “made an impact” in its first full quarter of operations.
Revenue surged to S$979.3 million in the three months to June 30 compared with S$120.1 million a year ago, according to a filing to the Singapore stock exchange today.
Earnings before interest, tax, depreciation and amortization, or Ebitda, were US$513.9 million, with margins of 52 percent, the statement said.
Singapore overturned a 40-year ban on casinos in 2005 to spur economic growth.
Genting’s US$4.7 billion Resorts World Sentosa opened on February 14 and features Southeast Asia’s only Universal Studios theme park.
Billionaire Sheldon Adelson’s Las Vegas Sands Corp opened its rival US$5.5 billion Marina Bay Sands casino resort in Singapore’s financial district in April.
The group’s Ebitda figure was “way above our S$244 million and consensus forecasts, which we think was S$220 million,” Aaron Fischer, a casinos analyst at CLSA Ltd in Hong Kong, wrote in an e-mail.
“With such a strong set of results, our fair value for the stock will likely be revised to at least S$1.50,” Fischer wrote.
Genting Singapore, controlled by Malaysia’s Genting Bhd, is the second-best performer on the Straits Times Index over the past 12 months, surging about 50 per cent compared with the benchmark’s 14 per cent gain.
The shares ended at S$1.28 today before the results announcement, compared to their record close of S$1.30 in December. Fischer’s target price for the stock is S$1.30, according to Bloomberg data. - Bloomberg
17 comments:
sold half of my holding of GSP at S$1.42 :)
Horse,
I believe many here will play the game the way you did. Sold half off at 1.42. Even though it closes at 1.46 for the day. Analyst might differ in their opinion that Genting SP is worth more than that or their target price is at such and such a price. I don't trust them. They are paid to spin out propaganda!
This quarter result showed thatGenting SP did fantastically well even after
(1) Marina Sand has kick started their casino telling everyone that Sand is NOT a threat to Genting..not for now at least. The market has taken that bait as well as the bait that
2) Genting Malaysia has bought over their baggages of foreign casinos in Britain which were Abastroes around their neck when it comes to earnings!
That two "news" spun the rise in Genting SP's price desite of the poor economic datas from US. That may be a knee jerk reflex the investors got and when the dust settles we may be more sober to realise that the economic environment after all will bring us down to earth.
I have not unload my Singapore Genting.. not much in my portfolio. Will not weigh me down much. I may play the way you did. Lets wait to see if we played it right or wrong here... haha
ya elmo, we will need to see... no right or wrong when come to investment, individual preference. I might take a pre-mature execution here but so long as one satisfy with his/her return.
My yearly target not high nor setting rediculous return. Simple method by mere 10 to 20% annually should suffice for me. The key is consistency with compounding effect. :)
Horse and elmo,
since both of you got heaps of Gen SP shares and Gen SP has gone up quite a bit last week, I suggest to you to follow an option play with capital extraction. Say for example you still have 10000 shares of SP, sell them all at $1.46 for $14600 or RM33580 (assume exchange rate at 2.3 and ignore transaction costs). Buy 28300 shares of Gen C7 call warrants at last closing price of RM0.415 for RM11745. You got to keep RM21836 (33580-11745). If SP goes up to $2.40 as suggested by the analysts, settlement value for C7 at expiry date of 10/3/11 is RM33413($2.40*2.3-1.978)*28300/3.
1.978 and 3 is the exercise price and conversion ratio respectively.
The profit with C7 will be RM(33413-11745)or RM21668, about the same you would make if you keep your SP shares to 10/3/11, which is $(2.40-1.46)*10000shares*2.3=21620.Remember that you have reduced your risk by switching from SP to C7, you pocket RM26318 now and do whatever you like with it.
What happen if SP go down to say $1.1 on 10/3/11? If you keep the SP shares, your value would have reduced to RM1.1*10000*2.3 or RM25300, or a loss of RM8280(33580-25300). Whereas the settlement value for C7 is RM5207(1.1*2.3-1.978)*28300/3), or a loss of RM6537(11745-5207), only 80% of that if you were to keep your SP shares.
Does this sound like a free lunch for you? it certainly looks like one to me for people like you who got SP shares and wants to keep to March 2011. The mis-pricing is because C7 is undervalued in relation to its underlying share of SP at this moment.
Hi KC,
Thanks and no thanks. I feel flattered. Honestly, I do not have “heaps” of Genting SP like our friend, Horse here. I have some which was offered to me last year when being Resorts shareholder, the Company while trying to off load it’s share in Genting SP was offered to us at dirt cheap price. I cannot remembered the offered price. I later bought into a few more lots at ?avrg 76 sing cents. That’s just about all.
Today at 1.46S$ it’s tempting to take some of the winnings off the table before the price dips. I am trying to restrain myself here as I see that GentingSp being a new company in Singapore will , I believe, have a huge upside to it. I have seen the long term investment result of both Genting and Resorts in Malaysia. I think Genting SP will potentially walk down the same path of these two mother companies.
Who knows. Time only will tell.
kc,
call warrant certainly is a good way for leveraging but what i don't like is the constraint in time where an expiry date is restricting an up surge of share during bad time. deviate from my focus of div and value stock. really not my cup of tea though it can turn out to be very fruithful if timing is right. :)
horse
Congrat!! your kfima hit 1.20, laughing all the way to bank :)
Portfolio continue accumulate more Pjdev at 71.5sen today
horse (and elmo),
'where is ze moola' has written an article about London Biscuits which is very comprehensive.
it is a contrarian analysis.. can take it as reference. http://whereiszemoola.blogspot.com/2010/08/review-of-london-biscuit.html
KC,
Yeah, I have read that article at
'where is ze moola' last night. He/she really goes into the history and the finer details of London Biscuit. That's what we investors should do if we are seriously interested in "owning" a business.
Today, Genting SP is rocketing like nobody's business. You still have some under your belt?
elmo,
yes, I must say that genting sp call warrants give me the best return. It was actually damn lucky for me as I did not expect genting singapore reported such good results. I punted on it basing only on the mis-pricing between genting sp and the bursa call warrants. The leverage effects gave me the amplified returns. What I have written to you and horse is actually an excellent risk management and riskless arbitrage play, not a gamble because you guys got genting sp shares already. I am a value investor like you but I do have some money to punt for excitement. Try read through thoroughly and understand it and you will appreciate what i said. With today's closing prices of genting sp and the bursa call warrants, the mispricing persists. That was why even I have sold some of the warrants at lower prices, I still bought back some because the mother share keeps on going up.
K C,
Congratulations. I feel happy for you to have got quite a bit of profit from this counter. Be careful, keep your eyes on the market sentiments. Here we have to play the Technical game rather than Fundamental. So keep your eyes (with an "s") on the crowd.
I like this story by John Gardner
..." The wisdom god, Woden, went out to the king of the trolls, got him in an armlock, and demanded to know of him how order might triumph over chaos.
"Give me your left eye", said the troll, "and I'll tell you."
Without hesitation, Woden gave up his left eye.
"Now tell me."
The troll said, " The secret is, "watch with both eyes!"
......
kc, congrat !! :)
elmo, that was a good one. hahaha :)
hng, i really admire yr trading method, keep adding yr piles on pjdev...hmmm, once fly, laughing all d way to bank. :)
frankly, im defensing & switching my portfolio slowly.
horse
Congrat again! both GENM, Genting hitting all year high... laughing all d way to bank :D)
horse
I've accumulate PJdev since last week at range 71-72sen. After today accumulation of PJdev at 71-71.5sen, both portfolio have almost reach maximum.
$$$$ if pjdev fly. :)
epf keeps disposing !!!
sign of bull end ?
Agencies could often check how they order in English. Including spellings and punctuations which are usually tested on their protect letters
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