Better odds than competition
Genting Berhad (GENT) has risen 3.4% YTD this year in anticipation of Genting Singapore’s opening on Jan 20th and the opening of its Universal Studio Theme Park and casino shortly afterward. Despite the rise, GENT is still the cheapest gaming stock compared to regional peers, trading at 2010E EV/EBITDA of 7.7x and P/BV of 1.9x, versus Wynn Macau (16.2x and 7.3x), and SJM (7.6x and 2.6x). Due to the expensive valuation of Genting Singapore (GENS (currently trading at 2010E EV/EBITDA of 22.7x and P/BV of 3.5x), investors might switch to GENT as a cheaper to the Singapore gaming market. GENT's stakes in GENS and GENM at current prices are worth RM27bn, almost equivalent to its market cap of RM28bn. At this price, investors are getting the plantations, power generation, and other businesses for close to zero. Pegging it at lower range of peers’ FY10E P/BV of 2.6x, we see GENT trading at RM10.40.
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