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Thursday, April 27, 2017

Genting Singapore: Next Upleg in Progress

Brief Background

Genting Singapore (“Genting SP”) is the owner & operator of the casino & theme park in Singapore known as Resort World Sentosa. Since it commenced operation in 2010, this casino has been profitable. From the chart below, you can see a sharp drop in profit in FY2015 as well as a recovery in FY2016. See the table below.

 

Table: Genting SP’s 10 years result

Investment Idea

Genting SP was reported to the vehicle used by the Genting group to bid for a casino license in Japan. In December 2016, Japan has passed a law that has legalized the setting up of casinos. The Japanese market was reported to be worth about USD30 billion (bigger than Macau). For more, go here.

Technical Outlook

Genting SP broke above the downtrend line, RR at S$1.00 in February. This is a confirmation that the price will not be going lower from that point onwards. What doesn't go down tends to go up! 



Chart 1: Genting SP monthly chart as at April 26, 2017 (Source: Shareinvestor.com)

Go up, it did. However, the price rise was capped by the horizontal line at S$1.04 from December 2016 until 2 weeks ago. On April 10, 2017, Genting SP broke above the S$1.04 mark, which signaled the start of the next upleg for this stock.



Chart 2: Genting SP weekly chart as at April 26, 2017 (Source: Shareinvestor.com)


Conclusion
Based on technical breakout, Genting SP is now a good trading BUY. For medium-term player, you may look at a target price of S$1.40. Good luck!

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