Feb 26, 2015 Newsdesk Latest News, Rest of Asia, Singapore, Top of the deck  
Shares in casino resort operator Genting Singapore Plc fell to a near one-year low of SGD0.975 (US$0.72) in early trading on the Singapore Stock Exchange on Thursday. The company’s 52-week low was SGD0.965, according to Bloomberg data.
The stock slipped below SGD1.00 in Wednesday trading, closing 6.22 percent down on the day at SGD0.980. It was apparently in reaction to the firm missing analyst estimates in its fourth quarter 2014 earnings on Tuesday.
Daiwa Securities Group Inc said in a note from Hong Kong on Wednesday that although Genting Singapore’s pending casino project on Jeju island in South Korea (pictured in an artist’s rendering) offered “a positive note”, the fact it was a foreigners-only venue meant it was unlikely to be significantly accretive to group earnings.
Genting Singapore announced on February 12 that it had broken ground on the Jeju scheme and hoped to open it in stages between 2017 and 2019.
“We believe its US$1.8-billion Resorts World Jeju (RWJ) in Korea could possibly receive the casino licence in 2016,” wrote Daiwa analysts Jamie Soo and Adrian Chan.
“The size of the casino still remains unclear, but we do not expect a significant contribution to earnings since only foreigners are allowed in. Our previous estimates show that RWJ would add only about 1-2 percent to Genting’s top line [earnings], assuming RWJ earns the average of foreigner-only casinos in Korea,” added the Daiwa team.
Genting Singapore’s net profit for the fourth quarter slipped 30 percent year-on-year, weighed by poor performance in the VIP gambling segment and player bad debt.
“Persistent headwinds in the VIP segment led to a weak set of results, in particular the Chinese segment,” said the Daiwa analysts.
“Going forward, Genting Singapore expects the outlook for the VIP segment to remain challenging, which is unsurprising as the Macau gaming industry experienced its eighth consecutive decline last month,” they added.
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