For QE30/9/2012, Genting's net profit dropped by 48% q-o-q or 53% y-o-y to RM279 million while revenue dropped by 7% q-o-q or 14% y-o-y to RM4.21 billion. Genting's bottom-line dropped due mainly poorer performance by the Leisure & Hospitality division. The main items which dragged down this division are:
1. RWS- drop in the win percentage in premium play business
2. RWG- increase payroll cost & promotion expenses
3. UK operation- drop in volume of business & hold percentage of its London casino operation, plus increase in bad debts write-off
These negative items had more than offset the increase in EBITDA by the Power division & the Plantation division (which was attributable to higher output than more than compensate for the softer prices).
Table 1: Genting's last 8 quarterly results
Chart 1: Genting's last 25 quarterly results
Valuation
Genting (closed at RM8.95 at the end of the morning session) is now trading at a PE of 14.5 times (based on last 4 quarters' EPS of 61.75 sen). At this PE, Genting is deemed fairly valued.
Technical Outlook
Genting is still in a long-term uptrend. That uptrend line support is at RM5.00- something which is not likely to be tested anytime soon. The immediate support is the horizontal line RM8.50.
Chart 2: Genting's monthly chart as at Nov 27, 2012 (Source: Tradesignum)
(Note: You may like to check out my most recent post on Genting where the technical outlook could be bearish for the medium-term.)
Conclusion
Based on poorer financial performance & nearly full valuation, I would rate Genting a HOLD. Given my recent technical study on this stock, you may even want to take a more cautious stand by avoiding the stock for a while.
Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Genting.
Hi Alex, would you mind to check ASAS(5975)?
ReplyDeleteMy average price was 1.75. I'm a but worry about the recently price slide.
I would like to know if there is any fundamental changed to this stock?
thanks for your effort.
Alex
ReplyDeletecheck with you, if we would like to calculate a company PE based on current stock price, so is to take current stock price divide by the accumulate EPS for the last 4 quarters? eg take the 4th quarters of 2011 and 1-3 quarters of 2012?
is that so?
Hi,
ReplyDeleteWhat are your call for Genting Singapore despite it rebound from SGD1.20, support with volume increased. Good sign if Genting singapore can trade above SGD1.30?
Hi Steven Lee
ReplyDeleteASAS has broken below its horizontal support of RM1.47. Its next support is at RM1.36 and then at RM1.20. I believe the stock will likely to be range-bound between RM1.36 & RM1.47.
Hi edge2002
ReplyDeleteThat's how I compute it. Some may use last year's EPS to compute the trailing PE and, for current PE computation, they will use projected EPS for current year.
Hi Ivan
ReplyDeleteGenting Singapore is testing its support at RM1.20-1.30. This support should hold for now.
Genting SP's valuation is not cheap. Its PE is about 20-21 times- much higher than Genting & GenM which are trading at 14-15 times.
I would rate Genting SP as a HOLD.