GentingHK14032011ke

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Gaming | 14 March 2011

BUY Genting Hong Kong Initiating Coverage Deft hands at play

Analyst

YEAK Chee Keong, CFA

[email protected]

(65) 6433 5730

Price US$0.395

Target US$0.540

ST Index 3,043.49

Historical Chart

Performance 1m 3m 6m

Absolute (%) -8.1 -11.2 -16.8

Relative (%) -6.3 -7.3 -16.7

Stock Information

Ticker code GENH.SI

GENHK SP

Market cap (US$m) 3,069.7

52-week high (US$) 0.535

52-week low (US$) 0.160

Shares issued (m) 7,771.3

6m avg d.vol (US$m) 21.0

Free float (%) 23.3

Major shareholders (%)

Lim Kok Thay (57.5)

Resorts World Ltd (18.4)

Key Indicators

ROE (%) 4.0

Net cash (US$m) -434.0

NAV (US cts) 25.8

Interest cover (x) 1.4

We initiate coverage on Genting Hong Kong Limited (GenHK) with a BUY

recommendation and a target price of US$0.54 based on sum-of-the-

parts valuation. Approximately half of our valuation is attributed to the

gaming operations as the company evolves from a cruise operator into

a gaming-focused enterprise. The unrealised potential from its casino

operations in Manila is mind-blowing, to say the least. Trading at an

adjusted FY11F EV/EBITDA of 10.6x and P/B of 1.6x, GenHK is the

cheapest gaming stock compared with its peers, in our view.

Gaming licence is the jewel in the crown

The crown jewel of GenHK is its gaming licence in the Philippines, which

allows it to operate up to 2,000 tables and 7,000 slots in two locations in

Manila. The licence is currently held by its 50%-owned associate, Travellers

International Hotel Group. When fully utilised, the attributable value to

GenHK from Travellers alone could amount to as much as US$0.56 per share.

Cruising up to speed in North America

The proposed IPO of Norwegian Cruise Line is expected to take place this

year, which could unlock more value for GenHK. In our view, this could also

be an avenue for GenHK to dispose of its cruise business to concentrate on

the gaming business. Nevertheless, the North American cruise market is

seeing one of the highest booking seasons in history with 2011 likely to be

another year of record passenger figures.

Restructuring efforts have paid off for Star Cruises

GenHK, which houses Star Cruises, is benefitting from a leaner balance sheet

and improved profitability after undergoing capital restructuring and cost

cutting. With the Asian cruise market growing rapidly, many cities vie to be

the Caribbean of the East and are building and/or upgrading cruise

terminals.

A good hand finally

In our opinion, the tide has just turned for GenHK. FY10 would be the first

year that it turns in a net profit after reporting losses for the past four

consecutive years. Our SOTP analysis values the stock at US$0.54 with an

implied FY11F adjusted EV/EBITDA of 13.0x and a potential upside of 37.3%.

Initiate with BUY.

Year End Dec 31 2008 2009 2010F 2011F 2012F

Sales (US$ m) 441.0 376.8 392.6 424.9 434.1

Pre-tax (US$ m) (97.6) (24.0) 76.8 175.2 203.8

Net profit (US$ m) (80.1) (25.3) 74.9 168.9 196.3

EPS (US cts) (1.08) (0.34) 1.01 2.27 2.64

EPS growth (%) n.m. n.m. n.m. 125.5 16.2

PER (x) n.m. n.m. 39.2 17.4 14.9

Adj. EV/EBITDA (x) 48.7 20.3 13.2 10.6 10.0

Yield (%) 0.0 0.0 0.0 0.0 0.0

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Genting Hong Kong 14 March 2011

2

Investment merits

Genting Hong Kong Limited (GenHK) was formerly known as Star Cruises Limited.

The new name was adopted in October 2009 to reflect the company’s focus – as

part of the overall strategy of the Genting Group – to become a global leisure,

gaming, entertainment and hospitality enterprise, with both land and sea-based

business.

A gaming-focused strategy

The most exciting part of GenHK’s business comes from its 50%-owned associate,

Travellers International Hotel Group, which holds a licence to operate casinos in

the Philippines. Resorts World Manila (RWM) marks the first land-based foray for

GenHK. Since its opening in August 2009, the gaming-cum-entertainment resort

has attracted an ever-increasing number of visitors. Travellers has the first-mover

advantage in launching the first integrated resort in the Philippines. Its second

integrated resort, Resorts World Bayshore City (RWB), could open in 2013-14.

Combined, the revenue potential from these two facilities could be in the region

of multi-billion-dollars a year, assuming the licence is operating at full capacity.

Third-largest cruise line in the world

Being the third-largest cruise operator in the world, GenHK has exposure to the

North American market through its associate, Norwegian Cruise Line (NCL). The

cruise industry is expected to witness another strong year of growth, riding on

record passenger growth. Cruise lines are planning to expand their capacities to

meet the rising demand. NCL also has two large cruise ships on order which are

expected to come on-stream by 2013 and 2014. Operating with the youngest

fleet and with a reputation for innovative itineraries and programmes, NCL is

ready to ride the next wave of growth. In addition, it is preparing for a public

listing this year, which could further unlock the value of the company. In our

view, this also could be an avenue for GenHK to dispose of the cruise business to

concentrate on its land-based gaming business.

Building a Caribbean of the East

In Asia, Star Cruises is an established player with intimate knowledge of the

market. Gaming has been the predominant focus, generating almost 60% of its

revenue. However, the industry is also seeing a gradual change as people accept

cruise as a form of alternative travel. We believe this should present more

opportunities for Star Cruises.

In the black after four consecutive years of losses; initiate with BUY

Through effective cost-cutting, sale and redistribution of assets and capital

restructuring, GenHK now has a stronger balance sheet. We also expect FY10 to

be the first year the company turns in a net profit after four consecutive years of

net losses. We value the stock using a SOTP methodology, deriving a target price

of US$0.54. Our target price implies an upside of 37.3%. Initiate with BUY.


3

Room for further upside

Sailing past a sea of red ink

Based on its historical financial records, GenHK was usually mired in a sea of red

ink and did not seem worthy of a second look. At the height of its problems in

November 2008, its share price plunged to US$0.06 as persistent losses battered

its cruise businesses. However, over the past nine months, GenHK has seen a

phenomenal turnaround in terms of share price performance. Part of the reason

could be the positive sentiments infused by other listed entities of the Genting

Group, riding on the regional gaming theme.

Capable of holding its own

The surge in GenHK’s share price, however, is not without solid ground. Even

without the influence of the Genting Group, we believe GenHK is capable of

holding its own. The crown jewel lies in its germinating land-based casino

business. Restructuring of the group’s businesses has also resulted in a stronger

balance sheet, together with improving operating profits, and these have not

gone unnoticed. Stock price has more than doubled over the past nine months

and we acknowledge that we might have missed part of the boat. Nevertheless,

with a new focused strategy and strong growth prospects, we believe there is still

headroom for further upside.

Gaming business is the key stock price catalyst

While we anticipate its cruise businesses to post strong recovery from the loss-

making years, we believe that the key stock price catalyst would come from its

land-based gaming business. Based on our forecasts, EBT contribution from

Travellers is expected to grow from a negligible amount in FY09 to US$125m in

FY13F, accounting for 45% of our total estimated EBT of US$275m for that year

(Figure 4).

Best played as a growth stock

We classify GenHK as a stock with high growth potential. Although it has been

incorporated since 1993, we believe it is currently in the early stage of a new

evolution into a leading land and sea-based gaming and entertainment

enterprise. After all the interest in Genting Singapore, it is time GenHK gets its

fair share of attention.


4

Figure 1: GenHK – net profit, FY05-1H10 Figure 2: GenHK – share price performance

Source: Company data Source: Bloomberg

Figure 3: Genting Group – share price performance

from Jan 2010

Figure 4: Increasing EBT contribution from

Travellers

Source: Bloomberg Source: Company data, Kim Eng estimates

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Index (Jan 10 = 100)

GENT

GENS

GENM

GENHK

GENP

5-45

27 32 41 54

-104

249

72 7694

1

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7187

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FY08 FY09 FY10F FY11F FY12F FY13F

US$ m

Star Cruises NCL Travellers

0.575

0.06 NCL deconsolidated

from FY08 onwards


5

Expanding gaming footprint

A gaming-focused strategy

Star Cruises Limited had its name changed to Genting Hong Kong to align with its

corporate strategy of diversifying into land-based integrated resorts and

entertainment under the Genting brand name. Already the world’s third-largest

cruise operator, GenHK is now eyeing the role of a leading global leisure,

entertainment and hospitality enterprise. Judging from the restructuring

activities undertaken by the Genting Group, gaming is the key focus of its entire

business and GenHK has been singled out to lead the expansion into East Asia

and Taiwan.

Figure 5: Genting Group and its gaming focus

Bloomberg

code

Listed members of

Genting Group Company description Current gaming operations

Possible future

gaming markets

GENT MK Genting Berhad Investment holding and management

company of Genting Group.

Through GENS, GENM and GENHK. n.a.

GENS SP Genting Singapore A leading integrated resorts development

specialist. Owns RWS and recently sold

Genting UK to Genting Malaysia

Resorts World Sentosa, Singapore. Japan

GENM MK Genting Malaysia Operates the only casino in Genting

Highlands. Recently acquired UK casino

businesses from Genting Singapore.

Resorts World at Genting

Highlands, Malaysia; 46 casinos in

UK under the brands Crockfords,

Maxims Casino Club, The Colony

Club, The Palm Beach, London

Mint, Circus, Maxims and Mint.

Vietnam

GENHK SP Genting Hong Kong Third-largest cruise operator in the world

with Star Cruises and Norwegian Cruise

Line. Also holds a 50% stake in Travellers

with a licence to operate casinos in the

Philippines.

Resorts World Manila at Newport

City, the Philippines; another

casino, Resorts World Bayshore

City, at Manila Bay (yet to be

constructed).

Macau, Taiwan,

Sri Lanka

GENP MK Genting Plantation A palm oil producer with 133,000ha of

plantation land in Malaysia and Indonesia.

Has also ventured into property

development and the biotechnology

industry.

n.a. n.a.

Source: Company data

The pie that grows and grows

Theoretically, the size of the gaming market is limited by the world’s population

and the amount of wealth available. Monies for gaming can also be geared up

with debt. On a more practical level, we are putting forth the notion that the

gaming market is an ever-growing one.

In Asia, the penetration rate for gaming is known to be low, despite the region

having some of the largest populations in the world. Additionally, Asian wealth is

improving rapidly with strong GDP growth potential and increasing per capita

spending. This is aided by strong tourist arrivals in the region. Put another way,

Asia has the greatest capacity for growth and GenHK is in the right place at the

right time. According to the report, Playing to Win, by PricewaterhouseCoopers

(PwC), a global professional services firm, Asia Pacific’s share of the gaming

market is estimated to almost double from 22% in 2009 to 41% in 2014.

Genting Hong Kong

6

Not just the sea, but also the land

GenHK’s g

of a 50% stake in Travellers in 2008 for US$335m. In June 2008, Travellers was

awarded a licence to develop and operate integrated resorts in two locations in

Manila. The first, Resor

second, Resorts World Bayshore City at Manila Bay, is awaiting regulatory

approval for construction to begin. RWM features an integrated leisure and

entertainment attraction with hotel facilities, sho

performing arts theatre and more importantly, a casino.

Figure 10: Current and potential land

Resorts World Manila (Newport City)

Casino

172-suite luxury

342-room 5

712-room affordable hotel, Remington

30,000

1,500-seat performing arts theatre

4 cinemas

Source: Company data, media reports

Figure 6: GDP growth rates for Asian countries 2010 (%)

Japan 4.2

China 10.3

Hong Kong 6.6

India 9.1

Indonesia 5.9

Malaysia 6.8

Singapore 14.8

South Korea 6.1

Taiwan 10.1

Thailand 7.0

The Philippines 6.9

Vietnam 6.8

Source: The Economist

Figure 8: Regional share of gaming market, 2009

Source: PwC report “Playing to Win”

EMEA

17%

Asia Pacific

22%

Latin

America

0%

Canada

4%

Not just the sea, but also the land

GenHK’s gaming operations were confined to its cruise ships until the acquisition



Manila. The first, Resorts World Manila (RWM), is already operational while the



entertainment attraction with hotel facilities, shopping mall, high


Figure 10: Current and potential land-based operations

Resorts World Manila (Newport City) Resorts World Bayshore City (Manila Bay)

Casino Casino

suite luxury hotel, Maxims Hotels

room 5-star Marriott Hotel Manila Theme park

room affordable hotel, Remington Museum

30,000-sq-m retail mall

seat performing arts theatre

4 cinemas


Figure 6: GDP growth rates for Asian countries Figure 7: Selected gaming market size2011 (%)

1.5

9.0

4.7

9.0

6.0

4.3

4.1

3.9

3.3

4.3

5.4

6.9

Country/Region Est. mkt size (US$m)

2010

Nevada (incl. Las Vegas) 9,950

Atlantic City 3,550

Macau 22,445

Singapore 2,750

The Philippines 607

Vietnam 81

Malaysia 920

Source: PwC report “Playing to Win”, Kim Eng estimates

Figure 8: Regional share of gaming market, 2009 Figure 9: Regional share of gaming market, 2014

Source: PwC report “Playing to Win”

US

57%

Canada

EMEA

13%

Asia Pacific

41%

Latin

America

0%

14 March 2011

aming operations were confined to its cruise ships until the acquisition



ts World Manila (RWM), is already operational while the



pping mall, high-end cinemas, a


based operations

Resorts World Bayshore City (Manila Bay)

Figure 7: Selected gaming market size

Est. mkt size (US$m) 2011-14

CAGR (%) 2010 2014

9,950 12,500 5.9

3,550 3,350 (1.4)

22,445 45,149 29.1

2,750 8,318 31.9

607 1,215 18.9

81 139 14.5

920 1,089 4.3

g to Win”, Kim Eng estimates

Figure 9: Regional share of gaming market, 2014

US

43%

EMEA

13%

Canada

3%


7

RWM playing out well

Since opening in August 2009, RWM has seen an ever-increasing number of

visitors every day. Of greater significance is the fact that it has penetrated the

Philippine casino scene. While this gaming market is not as established as the

more matured markets in Las Vegas and Macau, we believe it is because it does

not yet have the infrastructure and attractions to compete for casino-goers.

However, all this is set to change when the new Manila Bay Integrated City is

completed in 2013-14.

Figure 11: Resorts World Manila

Source: RWM website


8

Putting Manila on the gaming map

New star rising

Without a doubt, Las Vegas, Atlantic City and Macau are some of the most well-

known gaming destinations in the world. More recently, however, the buzz has

shifted to Singapore where two integrated resorts, Marina Bay Sands and Resorts

World Sentosa, opened their doors. Manila may soon join the ranks. With the

opening of RWM, GenHK is putting the Philippine capital on the gaming map.

During its 2Q10 results briefing, management revealed that RWM’s gaming

revenue has exceeded all expectations and that on some days, wins could match

any other casino in the world. With tourist arrivals in the Philippines hitting a

record level of 3.5m last year and expected to grow further, we think the market

to be tapped is bigger than it seems.

PAGCOR the monopoly operator

Before RWM’s opening, the casino scene in the Philippines was dominated by the

state-controlled Philippine Amusement and Gaming Corporation (PAGCOR). This

single monopoly was created in 1977 to tackle the proliferation of illegal casino

operations. This gives it the right to regulate, authorise and license casino gaming

in the country. In June 2007, the Philippine Congress passed an act to extend the

corporate life of PAGCOR by 25 years and renewable for another 25 years. The

new act expanded PAGCOR’s role from an operator to one with regulatory

responsibilities.

PAGCOR operates about 13 casinos in the Philippines with four of them in Metro

Manila. It also has another 25 exclusive clubs. PAGCOR is now leading a multi-

billion-dollar Vegas-styled casino and entertainment city project at the Manila

Bay area. Media reports suggested that it could be considering consolidating its

position and relinquishing its operator status to become more of a regulator

eventually.

The Bagong Nayong Pilipino-Manila Bay Integrated City

The Manila Bay Integrated City is a US$15b integrated resort, which will house

four casinos and other hotel and entertainment facilities. The entertainment city

spans 120ha of reclaimed land along Manila Bay in Paranaque City, a short

distance away from the international airport and central business district of

Manila. PAGCOR has awarded four provisional licences for the development of

the four casinos. Each licence holder will need to commit at least US$1b in

developing the resort over a 10-year period and spend at least US$400m in the

first two-and-a-half years. Along with the casinos, the Manila Bay area will also

boast a host of other entertainment facilities to boost tourism at the same time.

First-mover advantage

Travellers is one of the provisional licence holders for one of the four new

casinos. The others are Universal Entertainment Corp, Belle Corp and Bloombury

Investments. Having already set up RWM, Travellers has the first-mover

advantage in operating integrated resorts in the Philippines. Additionally,

management has revealed that Travellers is well ahead of the other licence

holders in terms of construction progress at the new integrated city.


9

Figure 12: Provisional licence holders of Manila Bay Integrated City project Licence holder Operating partners Name of project Plans

Travellers International 50%-owned by GenHK and

50% by Alliance Global

Resorts World Bayshore City Theme park

Hotels

Casino

Museum

Universal Entertainment

Corp (previously known

as Azure Corp), a

leading Japanese

gaming machine maker

Known for its ties with

Wynn Resort in Las Vegas

and Macau

Okada Resort Manila Bay Casino

2,000 hotel rooms

300 VIP suites

World’s largest oceanarium

Theatres

Sports arena

Museum

Giant ferris wheel

Belle Corp Partly owned by SM

Investment Corp, a

Philippine shopping

mall giant

The Belle Grande Manila Bay Target soft opening by 4Q11

17,600-sq-m casino

(~150 tables, 1,500 slots)

Hotels

Theatre

Bloombury Investments Linked to businessman

Enrique K. Razon Jr (head

of multinational port

operator, Int’l Container

Terminal Services Inc.) who

acquired controlling stake

from Jose CH Alvarez

n.a. Target opening by 4Q12

20,000-sq-m casino

(~200 tables, 1,200 slots)

Meeting and convention rooms

Health and wellness facilities


Figure 13: Bagong Nayong Pilipino-Manila Bay Integrated City

Note: The PAGCOR observation tower has been scrapped from the overall plan. Source: Web sources


10

Boost for tourism, competition for casinos

When the entertainment city is operational, most likely in 2013-14, the casino

and tourism scene in the Philippines will receive a major boost. In turn, stiff

competition will erupt among the casinos and will affect not just those in Manila

itself but also around the region. RWM will inevitably face the heat.

Where will demand come from?

With new casinos sprouting up in Manila and around the region, the question is

“Where will demand come from?” Media industry sources estimated the size of

the Philippine gaming market to be about US$0.85b in 2010, while PwC estimated

it at US$0.61 in its report, Playing to Win. However, according to PAGCOR, there

is also a large market of illegal gaming whose size is estimated to be in the region

of US$1.7b. If other forms of gaming such as lottery and horse betting were

included, legal casino gaming would only make up 20% of the market. Based on

the PwC report, the Philippine casino gaming market is expected to grow at

18.9% CAGR between 2011 and 2014. We expect the demand to come from

1) the migration of illegal gaming to legal gaming, 2) the lure of a new attraction

and proximity to visitors from nearby region, and 3) increased tourist arrivals in

the region.

Potentially a US$3.0b-a-year business

RWM currently operates with 219 tables and 1,200 slots. By end-2011 it is

expected to have 300 tables and 1,600 slots. The opening of its malls and hotels

should contribute another 10-15% in revenue. RWM generated daily gross

gaming revenue of about US$1.6m in 2010 and this could rise to about US$1.8m

in 2011.

However, Travellers has the licence to operate up to 2,000 tables and 7,000 slots

in the two sites, RWM and Resorts World Bayshore City (RWB). When fully

utilised, it could be a US$3b-a-year business with EBITDA of US$1.2b. Applying an

EV/EBITDA multiple of 13x, the attributable value to GenHK from Travellers alone

could be as much as US$0.56 per share in this case. However, our actual forecasts

are more conservative, in which we value Travellers at US$0.25 per share (See

Page 22 and Figures 36 – 39).

Figure 14: Travellers’ potential

2010F 2011F 2013F Full potential Est. future value based on full potential

Resorts World Manila 325 456 571 1,501 EBITDA (US$ m) 1,230

Gaming Revenue (US$ m) 296 416 521 1,368 Applied EV/EBITDA (x) 13

Non-gaming Revenue (US$ m) 29 40 51 133 Assumed Debt to Equity 70%

Operating Stats

No. of Tables 219 300 300 1,000 Enterprise Value (US$ m) 15,984

No. of Slots 1,200 1,600 1,600 3,500 Less: Debt (US$ m) 6,582

Resorts World Bayshore City 0 0 212 1,573 Equity Value (US$ m) 9,403

Gaming Revenue (US$ m) 0 0 194 1,368 GenHK’s stake (50%) 4,701

Non-gaming Revenue (US$ m) 0 0 19 205 Diluted No. of Shares (m) 8,455

Operating Stats Equity value per share (US$) 0.56

No. of Tables 0 0 150 1,000

No. of Slots 0 0 1,200 3,500

Total Revenue (US$ m) 325 456 784 3,074

EBITDA (US$ m) 124 176 313 1,230

Source: Kim Eng estimates


11

Foray into existing and new gaming markets

Taking on the big boys in Macau

A more ambitious but not unachievable goal is entry into Macau, one of the

largest and most lucrative gaming markets in the world. While the Genting Group

does not yet have a meaningful presence in this territory, where SJM, Wynn

Macau, Galaxy and Sands China are among the well-entrenched casino players,

GenHK has long set eyes on a slice of the pie. To be sure, it is no novice to the

field, given the extensive casino operations of its sister companies such as

Genting Singapore.

As early as 2007, GenHK took the first step into Macau by acquiring a 75%

interest in Macau Land Investment Corporation (MLIC) together with Genting

International. The reason: MLIC owns a piece of land, about 8,100 sq m in area,

which could be developed. However, new developments in the territory are

currently stalled as the government has announced a cap on the number of

gaming tables at 5,500 until 2013 and will not accept any new casino application

during this period.

Appeal of Sri Lanka

GenHK’s subscription for shares in the Union Bank of Colombo in 2010, resulting

in a 5.96% stake, appears to confound investors. Collectively, the Genting Group

holds an effective 26% stake in the bank. Market talk suggested that the move

was a stepping stone for GenHK to be ready for an opening up of legislations in

Sri Lanka for a new gaming market. The island appeals chiefly because it has

recently emerged from a civil war and, based on our conversations with

management, is reminiscent of Malaysia when it was an emerging economy many

years ago.

Taiwan gaming market en route to liberalisation

Taiwan is another potential market where legislation to liberalise casino gaming

is underway. GenHK has been operating cruises to Taiwan and we believe it is

part of its efforts to position itself for land-based operations if market

liberalisation were to materialise.


12

2011 to be another strong year for cruise industry

Resilient and high growth

During the global financial crisis in 2008-09, the cruise industry displayed

remarkable resiliency, leading up to impressive gains in 2010 with 15m

passengers carried and an estimated occupancy rate of 103%. According to Cruise

Lines International Association (CLIA), 2011 is expected to be another year of

record-high cruise passengers with the industry outperforming other segments of

travel. Since 1980, passenger growth has averaged more than 7.5% pa. CLIA

expects 16m passengers for 2011, up 6.6% YoY, with 11.7m likely to come from

the North American market.

More value in cruises

Consumers are seeing increased value in cruises compared to other forms of

travel. Anecdotally, this optimism is reflected in improvements in booking

windows and higher yields reported by public cruise companies. In a survey

conducted by CLIA, agents anticipate an average booking window of 5.8 months

in 2011 as opposed to 4.5 months in 2009. The latest “Wave Season” is also well-

received with cruise lines reporting record booking trends. In the cruise industry,

the “Wave Season” refers to the period between January and March when the

highest volume of booking is seen and cruisers get the best discounts.

Biggest and most matured market

The North American market is the primary and biggest market for cruise

activities, accounting for more than 70% of cruise passengers in the world.

Europe is next and is growing rapidly. NCL commands a market share of about

9.8% in the North American market. Asia is emerging as the next growth engine

with the increasing affluence of the middle-class. Noting the potential for growth

in Asia, the Royal Caribbean Cruise Line (RCL) is already penetrating the region.

Fortunes and plans of other North American cruise lines

Carnival Corporation (CCL) and RCL are the largest North American cruise lines

with 22 ships each. Riding on the same macro factors, the duo have delivered

good performances and like many major cruise lines, they plan to expand their

capacities with new ship additions in the next few years, confirming the general

expectation in the cruise industry of greater demand ahead. NCL, too, is following

suit with two new ships scheduled for delivery in 2013 and 2014.

Figure 15: Cruise passenger growth, 1980-2010 Figure 16: Top 10 cruise destinations for 2011

1 Caribbean and Bahamas

2 Alaska

3 The Mediterranean

4 Europe

5 Hawaii

6 Panama Canal

7 European Rivers

8 Bermuda

9 Canada and New England

10 Mexico and US West Coast

Source: CLIA Source: CLIA

Genting Hong Kong

13

Figure 17: Top 10 largest North American cruise lines and planned expansion

Cruise li

Royal Caribbean Cruise

Carnival Corporation

Princess

Costa

Norwegian Cruise Line*

MSC

Holland

Celebrity

Cunard

Hurtigruten

*NCL has plans to add 4,000 berths each in 2013 and 2014. Source: CLIA

Figure 18: 2011 North American cruise market share

Source: Cruise Market Watch

Carnival

52.9%Royal

Carribean

27.6%

MSC

1.6%NCL

9.8%

Disney

3.3%

Other

4.8%


Planned berths

Cruise line Current berths Ships

Royal Caribbean Cruise 61,888 22

Carnival Corporation 54,602 22

Princess 37,220 17

30,785 15

Norwegian Cruise Line* 26,346 11

24,358 11

Holland 23,493 15

Celebrity 20,068 10

Cunard 6,712 3

Hurtigruten 5,923 13

*NCL has plans to add 4,000 berths each in 2013 and 2014. Source: CLIA

2011 North American cruise market share Figure 19: 2011 rest-of-world cruis

Source: Cruise Market Watch

Carnival

52.9%

Other

4.8%

Royal

Carribean

25.6%

MSC

5.1%

Disney

1.9%

NCL

7.7%

Louis

1.7%

14 March 2011


Planned berths

up to 2012 % addition

0 0%

7,342 13%

-710 -2%

6,024 20%

0 0%

5,100 21%

0 0%

3,830 19%

0 0%

0 0%

world cruise market share

Carnival

51.6%

Other

6.4%


14

NCL – a turnaround story

Poor historical performance with seasonal earnings

NCL was acquired by GenHK in 2000 and historically, its profitability had not been

smooth sailing. To be fair, the cruise industry suffered from the effects of the

financial crisis in 2008. Nevertheless, in comparison to other major cruise line

such as RCL and CCL during those periods, NCL does seem to pale in comparison

with lower net yields. However, NCL has shown positive signs of a turnaround

with its restructuring efforts.

Figure 20: Seasonality in NCL’s revenue and earnings


Restructuring makes a difference

Formerly a 100% subsidiary of GenHK, NCL became an associate company in 2008

when private equity players Apollo Management and TPG Capital acquired a

combined 50% stake in the cruise line for US$1b. It was a time when the cruise

line was struggling amid the global recession. NCL reported losses of US$227.0m

in 2007 and US$211.8m in 2008. In 2009, signs of a turnaround emerged as it

turned in its first positive net profit of US$67.2m since 2005. Post-recession

rebound aside, we believe a far more important reason for the turnaround was

the restructuring and repositioning of the company, which led to improved ticket

pricing and lower net cruise cost (eg, disposal of older ships, reflagging US-

flagged ships and cutting unprofitable routes and operations).

Youngest fleet among major cruise liners

NCL’s fleet of 11 ships has an average age of about six years, making it the

youngest fleet among major North American cruise lines. This was achieved

through the disposal of several older ships (Norwegian Dream, Norwegian

Majesty and Marco Polo). NCL also ploughed US$1.3b into buying new ships and

took delivery of the Norwegian Epic, its largest passenger ship with 4,100 berths,

in June 2010. It also has two other 143,500 GT with 4,000 passenger capacity

ships on order from Meyer Werft GmBH of Germany, pending delivery in 2013

and 2014. The total contract price for these two vessels is estimated to be

US$1.7b. Financing has been secured from a syndicate of banks for export credit

financing.

-300

-200

-100

0

100

200

300

400

500

600

700

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10

US$ m

Revenue EBITDA Net Income


15

Rise in net yield reflects improving efficiency

NCL has reported an increase in net yield along with other cruise operators as

they ride on improved demand. This development is in stark contrast to the

substantial plunge in net yield in 2009, an industry-wide phenomenon at the

time. However, a more important observation is that NCL is closing the gap in net

yield between itself and both CCL and RCL. We regard this as evidence of a real

improvement in its operating efficiency.

Figure 21: Net yields – NCL vs CCL vs RCL


New cruise ships add to capacity

Following the success and popularity of its newest ship, Norwegian Epic, NCL is

hoping to replicate this success with two other similar ships. When they come

into service in 2013 and 2014, the new ships would boost existing capacity by

approximately 30% and possibly increase revenue by about 47% vis-à-vis FY10.

Figure 22: Potential from addition of new ships

FY10 With addition of new ships

Berths 26,352 34,352

Passenger Cruise Days 9,559,049 13,603,392

Capacity Days 8,790,980 12,366,720

Occupancy 109% 110%

Revenue (US$ m) 2,012 2,966

Passenger ticket 1,393 2,054

Onboard and Other 620 911

EBITDA (US$ m) 400.4 691.0

EBITDA Margin 19.9% 23.3%

Source: Company data, Kim Eng estimates

120

130

140

150

160

170

180

190

200

2004 2005 2006 2007 2008 2009 2010

NCL CCL RCL

NCL closing the gap

in net yields with

CCL and RCL


16

Unlocking value through public listing…

NCL announced last October its plans to go public in the US in 2011 with a

relatively small IPO offering of US$250m, according to its filings with the US

Securities and Exchange Commission. We believe the public listing will serve to

unlock more value in NCL through greater earnings visibility and business

marketability.

…and a chance to cash out

At the same time, we believe that a potential listing offers a chance for Apollo,

TPG Capital and GenHK to cash out on their investments. This makes natural

sense for Apollo and TPG Capital who are private equity players. For GenHK, we

believe that it may decide to do so in order to concentrate on expanding its land-

based gaming business. Although we expect improving profitability from NCL, it is

after all a relatively volatile business, judging from its historical performance. To

recap, GenHK sold 50% of its stake for US$1b to Apollo and TPG for a gain of

US$80.8m. We believe that if it decides to cash out, this would be a minimum

level that it would sell its remaining stake at.


17

The Caribbean of the East

Gaming and cruising go hand in hand

Unlike the American cruise market in which cruises are regarded as a form of

holiday and an alternative to air travel, many Asians book a cruise with gaming in

mind. This is reflected in the proportion of gaming revenue generated by Star

Cruises in comparison to NCL. Unlike NCL, the bulk of Star Cruises’ total revenue

comes from gaming and not from the sale of passenger tickets. However, this

trend could slowly be changing as cruise lines roll out more interesting itineraries

to develop Asia into a major cruise hub.

Figure 23: Snapshot of Star Cruises’ and NCL’s FY09 revenue breakdown

Star Cruises US$ m NCL US$ m

Total Revenue 377 100% Total Revenue 1,855 100%

Passenger ticket revenue 95 25% Passenger ticket 1,276 69%

Onboard and other revenues 32 8% Onboard and Other 579 31%

Gaming revenue 219 58%

Charter hire and others 31 8%


Changing the Asian mindset

Asia has an all-year-round sailing condition similar to the Caribbean, as well as a

variety of ports and destinations. As such, it seems to have all the makings of a

major cruise hub. The key lies in changing the mindset of its people to view

cruising as a vacation alternative, separate from gaming. This has to be done by

introducing more innovative itineraries and exciting activities, as well as cruise

destinations. Happily, the change is taking place – slowly but surely. Structurally,

we believe the Asian cruise market has the wherewithal to grow. There are over

3.5b people in the Asia Pacific and the cruise penetration rate is only about 0.05%

compared to 3.2% in North America and 2.4% in the UK.

Possibly 7m passengers a year by 2015

At the inaugural meeting of the Asia Cruise Terminal Association (ACTA) last

December, Mr Soo Kok Leng, the chairman of the Singapore Cruise Centre,

estimated that Asia’s cruise industry may see up to 7m passengers by 2015. This

was in contrast to a forecast of 2m passengers in a report by Britain’s Ocean

Shipping Consultants, published in 2005. According to industry players, the

number of passengers for the Asia Pacific may have already exceeded the 2m

mark. In 2009, passenger throughput hit 1.8m in Hong Kong and 1.1m in

Singapore, the highest in the Singapore terminal’s 19-year history. The forecast of

7m passengers thus seems like an achievable target.


18

Scramble to build/upgrade cruise terminals

Singapore, Hong Kong and Shanghai have each announced plans to upgrade their

existing terminals and/or build new ones as they vie to become Asia’s cruise hub.

Although this would heighten competition among port operators, it will also fuel

cruise activities in the region, auguring well for operators like Star Cruises.

In October 2009, Royal Caribbean Cruises, Silversea, Costa Cruises and Star

Cruises signed a Memorandum of Understanding (MOU) to promote the

development, professional growth and commercial success of the cruise industry

in Asia. And ACTA was formed recently with the aim to develop Asia into a cruise

hub. Investment in port infrastructure is important to facilitate the delivery of

services and to compete with the well-established North American and Caribbean

markets.

Figure 26: Bid to become Asia’s cruise hub

Recent cruise terminal activities

Singapore Upgraded International Cruise Terminal at SCC@Harbourfront.

Building new International Cruise Centre at Marina South to double cruise

berthing capacity by 2011.

Hong Kong Building new cruise terminal at the old Kai Tak Airport by 2013.

Shanghai Built second cruise terminal at Paotai Bay in Baoshan District’s Wusong Port.

Building China’s largest cruise terminal at the mouth of Huangpu River.

Korea Incheon to build new international cruise terminal by 2014.

Vietnam Plans to build new ferry and cruise terminal in Port of Danang.

Source: Media reports

Figure 24: Cruise penetration rate Figure 25: Global cruise sales

Region Penetration rate

North America 3.2%

UK 2.4%

Europe 1.0%

Canada 2.3%

Australia 1.5%

New Zealand 2.7%

Asia Pacific 0.05%

Region 2009 value (US$ m) % market share

North America 16,706 56.7%

Western Europe 5,997 20.3%

Asia Pacific 5,393 19.3%

Latin America 907 3.1%

Australia 277 0.9%

Eastern Europe 154 0.5%

Middle East/Africa 51 0.2%

Total 29,485 100%

Source: Media reports Source: Euromonitor International


19

A revamped Star Cruises

Flexibility in asset deployment

Star Cruises has been proactive in redeploying its assets, stepping up marketing

efforts and introducing changes to its itineraries in a bid to maintain its industry

positioning. SuperStar Virgo, the largest and most extravagant Asian cruise ship,

was redeployed to Hong Kong in 2008 with marketing efforts in China and India.

This brought fresh niche markets, such as meetings and incentive groups

markets, to cruise on SuperStar Virgo. The ship has been redeployed and

currently serves the Singapore and Malaysia routes, and we understand that

SuperStar Pisces might be moving to Hong Kong while SuperStar Aquarius would

be moved to be based in Taiwan. Cost-cutting measures were also taken, which

yielded positive results as reflected in the improved EBITDA margins.

Penetrating new markets

In August 2009, Star Cruises became the first cruise line to bring mainland

Chinese tourists to Taiwan on SuperStar Aquarius. The trip was met with such

success that Star Cruises has since increased the frequency of such cruises. This

opens up a new and enormous market in the Greater China region.

Getting it right in Asia

Star Cruises has been in the Asian market for a considerable time and its

knowledge of it surpasses that of many of its newer competitors. If anything, the

cruise line has got one thing right and that is the Asian cruise market is more

about gaming than cruising, at least for the next few years. Many North American

cruise lines that see opportunities in the Asian market have failed to grasp this

fact and continue to operate cruises similar to the ones back in their home

country. Nevertheless, we believe they are making inroads and it is possible they

may change the mindset of Asians through exposure. But this will take a while. In

the meantime, they could be bleeding losses.

Putting assets to better use

Of the eight ships Star Cruises owns, only four are effectively operating at this

juncture as the company has reorganised its assets to better utilise them. As for

the rest, one is on charter to NCL while the other three – Megastar Taurus,

Megastar Aries and Norwegian Dream – are being laid up and could be sold. We

believe the total sale value would be in the region of US$500-600m. Star Cruises

is constantly on the lookout for more lucrative and efficient routes for its

operating ships, and seeking the best way to use them to generate the highest

revenue for the company.


20

Financials

Not-so-straightforward comparison

Comparing the historical financials of GenHK is no straightforward task. This is

because prior to FY08, NCL was a subsidiary and its financials were consolidated

with Star Cruises’. However, NCL ceased to be a subsidiary from FY08 and its

results have subsequently been reported at the associate level. In addition, due

to the nature of the cruise business, depreciation charges are high and EBITDA is

therefore an important measure to examine.

Profitability masked at net profit level

GenHK’s EBITDA has been positive but profitability may have been masked by the

net losses reported at the net profit level. This is due to the heavy depreciation

and interest charges. From FY08, contributions from NCL and Travellers were

reflected at the associate and JV lines, which would contribute to net profit but

not EBITDA.

Adjusted EBITDA a better gauge

The topline and EBITDA thus mainly reflect revenue and profitability from Star

Cruises’ business. Going forward, net profit could overtake EBITDA as

contributions from NCL and Travellers increase. We therefore introduce adjusted

EBITDA figures in which 50% each of NCL’s and Travellers’ EBITDA are added to

GenHK’s EBITDA (Figure 29).

Figure 29: Adjusted EBITDA

(US$ m) FY08 FY09 FY10F FY11F FY12F FY13F

EBITDA (US$ m) 50.9 83.8 108.0 123.5 128.6 139.7

Adjusted EBITDA (US$ m) 100.6 240.8 370.0 461.5 492.4 591.7

Adjusted EV/EBITDA (x) 48.7 20.3 13.2 10.6 10.0 8.3


Figure 27: EBITDA vs net profit Figure 28: EBITDA margin vs net profit margin

Source: Company data, Kim Eng estimates Source: Company data, Kim Eng estimates

-300

-200

-100

0

100

200

300

400

FY05 FY06 FY07 FY08 FY09 FY10F FY11F FY12F FY13F

US$ m

EBITDA Net Profit -30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%


EBITDA Margin Net Margin


21

Balance sheet strengthening

GenHK’s current balance sheet is very different from what it was like three years

ago. Following a series of restructuring, it has been tidied up considerably. For

example, in FY07, the current ratio was 0.3x and net gearing was 1.8x. In 1H10,

the current ratio stood at 1.7x and net gearing was 0.15x. The steps taken to

strengthen the balance sheet included the following:

� Sale of 50% of NCL for US$1.05b. This resulted in the deconsolidation of NCL’s

balance sheet, effectively taking US$3.2b in debt off GenHK’s balance sheet.

� Sale of ships (Gemini, Majesty and Queen) in 2008, raising cash of US$173m.

� Issue of US$150m worth of convertible bonds.

� Sale of Port Klang Cruise Center and Shanghai properties for US$56m.

Cash flow turning positive

GenHK has been generating positive operating cash flows from its businesses.

Investing outflows were rather significant in FY07 and FY08 due to the

acquisitions and investments. We expect the positive operating cash flows to

continue and net cash flow to turn positive with no major capex at the group

level other than normal maintenance capex. However, at the associate level, NCL

has a US$1.7b commitment for its two new ships, in which it has secured

financing. Travellers also has a US$1.3b commitment for the development of

casinos at the two sites in Manila.

Dilutive convertible loans

GenHK issued US$150m worth of convertible bonds on 20 August 2009. This was

a step to recapitalise the company amid the global financial crisis. The proceeds

raised were used to repay the group’s borrowings as well as deployed for general

working purposes. The conversion feature, together with the low conversion

price relative to the stock price, indicates possible dilution to the stock. We are

therefore treating the convertible bonds as equity.

Figure 32: Convertible bonds

Principal amt

Due

Interest

US$150m

August 2016

7.5% paid

Conversion features Right of conversion to ordinary

shares at initial conversion price

of HK$1.13 (US$0.15)

semi-annually No. of conversion shares 1,028,761,061


Figure 30: Decreasing gearing Figure 31: Improving net cash flows

Source: Company data, Kim Eng estimates Source: Company data, Kim Eng estimates

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

FY05 FY06 FY07 FY08 FY09 FY10F FY11F FY12F FY13F -800

-600

-400

-200

0

200

400

600

800


US$ m

Operating Cashflow

Investing Cashflow

Financing Cashflow

Net Cashflow


22

Revenue and profit forecasts

We expect both Star Cruises and NCL to experience higher occupancy rates,

driven by the positive industry dynamics discussed earlier. Ticket prices, too, look

set to trend higher. This combination of factors should fuel revenue growth.

NCL’s revenue would also increase from a capacity boost when its new cruise

ships come into operation in 2013 and 2014. Margin expansion should follow

with EBITDA margins likely to post an improvement to 22-23% eventually. Star

Cruises’ margins would also be enhanced as it redeploys its assets to maximise

utilisation and garner more gaming revenue.

As for Travellers, we believe RWM would continue to deliver positive results with

EBITDA margins at close to 40% level. The action will get bigger when RWB starts

operation in 2013-14. However, we have been conservative in our forecasts in

deriving our current valuation of US$0.25 per share for Travellers. Our forecasts

assume 450 tables and 2,800 slots by 2013, growing to 1,000 tables and 4,000

slots by 2017 which is slightly more than half of its full potential. We also

performed a scenario analysis based on different assumptions in the number of

tables and slots and its effects on our DCF value of Travellers (Figure 39). Our

base case key assumptions and forecasts are presented in Figure 33.


23

Figure 33: Key model forecasts and assumptions

FY2008 FY2009 FY2010F FY2011F FY2012F FY2013F

Star Cruises

Operating Stats

Passenger Cruise Days ('000) 2,106 1,504 1,469 1,573 1,606 1,721

Capacity Days ('000) 2,492 1,654 1,686 1,691 1,691 1,812

Occupancy Rate 85% 91% 87% 93% 95% 95%

Revenue (US$ m) 436.6 376.8 392.6 424.9 434.1 467.3

Passenger ticket revenue 152.7 95.1 108.0 118.9 120.6 131.8

Onboard and other revenues 52.6 31.7 30.7 33.0 33.7 36.1

Gaming revenue 217.3 218.7 224.8 243.0 249.8 269.4

Charter hire and others 14.0 31.3 29.1 30.0 30.0 30.0

Operating Expenses excl Dep & Amort (US$ m) 312.0 223.3 223.4 239.8 242.6 259.9

Ship Operating Expenses 247.7 194.6 182.2 195.0 197.6 211.7

Fuel Cost 64.3 28.6 41.1 44.8 45.0 48.2

EBITDA (US$ m) 50.9 83.8 108.0 123.5 128.6 139.7

EBITDA Margin (%) 11.5% 22.2% 27.5% 29.1% 29.6% 29.9%

Norwegian Cruise Line

Operating Stats

Passenger Cruise Days ('000) 9,504 9,243 9,559 10,383 10,478 11,665

Capacity Days ('000) 8,901 8,451 8,791 9,439 9,439 10,555

Occupancy Rate 107% 109% 109% 110% 111% 111%

Revenue (US$ m) 2,106.4 1,855.2 2,012.1 2,221.7 2,252.1 2,537.3

Passenger ticket 1,501.6 1,275.8 1,392.5 1,533.4 1,557.7 1,764.7

Onboard and Other 604.8 579.4 619.6 688.3 694.4 772.6

Cruise Op Expenses (US$ m) 1,578.5 1,289.5 1,347.3 1,435.5 1,452.5 1,615.3

Comm, transport & others 341.9 311.3 379.7 367.5 370.8 414.1

Onboard & others 182.8 158.3 153.1 169.1 170.6 190.1

Payroll & related 377.2 318.2 265.4 298.8 305.4 336.9

Fuel 258.3 162.7 207.2 228.4 230.5 256.6

Food 126.7 118.9 114.1 124.6 125.7 140.0

Other 291.5 220.1 227.8 247.1 249.4 277.6

EBITDA (US$ m) 99.3 324.1 400.4 500.3 509.6 590.6

EBITDA Margin (%) 4.7% 17.5% 19.9% 22.5% 22.6% 23.3%

Travellers International

Operating Stats

Resorts World Manila estimated

Table - Daily Win (US$) 0 600 2,800 3,200 3,500 3,700

Slot - Daily Win (US$) 0 30 185 200 220 220

No. of Tables 0 109 219 300 300 300

No. of Slots 0 872 1,200 1,600 1,600 1,600

Resorts World Bayshore City

Table - Daily Win (US$) 0 0 0 0 0 2,800

Slot - Daily Win (US$) 0 0 0 0 0 150

No. of Tables 0 0 0 0 0 150

No. of Slots 0 0 0 0 0 1,200

Total Revenue (US$ m) 0.0 8.6 325.5 455.8 544.8 783.7

Gaming Revenue 0.0 8.2 296.5 415.5 496.6 714.4

Hotel, food Beverage & Others 0.0 0.4 29.0 40.3 48.2 69.3

EBITDA (US$ m) 0 -10.0 123.7 175.7 217.9 313.5

EBITDA Margin (%) 0.0% -115.7% 38.0% 38.6% 40.0% 40.0%

Source: Company data, Kim Eng estimates, Note: SG&A expenses to derive EBITDA are not shown in table


24

Valuation and recommendation

We initiate coverage on GenHK with a BUY recommendation. The company is in

the early phase of a transformation into a leading land- and sea-based gaming

and entertainment enterprise as it morphs from a cruise-oriented business to a

gaming-focused entity. We believe there is potential for further upside even

though its share price has more than doubled over the past nine months.

In our view, positive developments that will drive the value of the stock include:

1. Growing involvement in the gaming business through RWM and the

upcoming RWB.

2. Improving business of NCL, with capacity expansion underway.

3. Impending listing of NCL.

4. Growth of the Asian cruise industry.

5. Successful restructuring of GenHK with improved balance sheet strength.

We value GenHK using a sum-of-the-parts (SOTP) methodology.

We value Star Cruises, its Asian cruise business, based on 13x FY11F EV/EBITDA,

which is a premium to peer cruise lines. We believe this is justified given the high

level of gaming content in its business vis-à-vis its counterparts.

For NCL, we peg our valuation to its peer and value it at 10x FY11F EV/EBITDA.

Capacity expansion from the addition of two new ships will increase its EBITDA

substantially, although this will not be visible until 2013 and 2014 when the ships

become operational.

As for Travellers, we use the discounted cash flow (DCF) methodology as we

believe it is more reflective of the cash-generating nature of the company’s

casino and entertainment businesses, as well as the future cash flow as the

casino business grows and new entertainment facilities come onboard. Using our

base case assumptions, our DCF model values GenHK’s share of Travellers at

US$0.25 per share. We also perform a scenario analysis of the outcomes based

on different sets of assumptions on the number of tables and slots as presented

in Figure 39.

Our SOTP valuation model yields a fair value of US$0.54 per share using our base

case assumption, translating to an upside potential of 37.3% from its current

share price. The implied adjusted FY11F EV/EBITDA is 13.0x, which is

undemanding in our opinion, given the growth potential of GenHK. We initiate

coverage with a BUY recommendation.


25

Figure 34: SOTP valuation

FY11F

EBITDA

Valuation

basis

Enterprise

value

Net

debt/(cash)

Equity

value Stake

Attributable

value

Per share

value

(US$ m) (US$ m) (US$ m) (US$ m) (%) (US$ m) (US$) Remarks

Star Cruises

124 13x

EV/EBITDA 1,606 291 1,314 100% 1,314 0.16

Premium to

peers due to

gaming nature

NCL 500

10x

EV/EBITDA 5,003 3,145 1,858 50% 929 0.11

Pegged to

peers

Travellers 176 DCF 4,242 50% 2,121 0.25

See Fig. 39 for

other scenarios

Others n.a. Book Value 221 100% 221 0.03

RNAV (US$ m) 4,586 0.54

Weighted Avg No. of Shares (m) 7,426

Convertible Bonds (m) – see Figure 32 1,029

Fully Diluted Weighted Avg. No. of Shares (m) 8,455

RNAV per Share (US$) 0.542

Current Share Price 0.395

% upside/(downside) 37.3


Figure 35: Peer comparison

Mkt Cap Last EV/EBITDA (x) PER (x) P/B (x) Debt/Equity

Curr (b) Price 2011F 2012F 2011F 2012F (%)

Cruise Lines

Carnival Corp USD 33.6 40.45 8.9 10.0 13.8 11.5 1.4 40.7

Royal Caribbean Cruises Ltd USD 9.4 43.39 9.4 10.2 12.9 10.7 1.2 115.2

Average 9.1 10.1 13.4 11.1 1.3 77.9

Regional Gaming Peers

Galaxy Entertainment Group Ltd HKD 46.4 11.32 14.4 23.5 37.5 26.6 5.1 69.4

SJM Holdings Ltd HKD 70.1 12.80 11.2 13.9 20.5 15.7 6.6 92.7

Sands China Ltd HKD 137.0 17.02 10.1 13.7 21.4 15.2 4.0 71.8

Wynn Macau Ltd HKD 108.9 21.00 16.1 20.0 26.2 20.8 28.9 212.6

Genting Singapore PLC SGD 23.9 1.96 11.2 12.9 21.3 17.8 4.7 68.8

Average 13.7 16.9 27.8 20.6 6.9 142.5

World Gaming Peers

Las Vegas Sands Corp USD 29.0 39.89 10.3 12.5 22.3 17.9 4.4 120.2

MGM Resorts International USD 6.3 12.87 11.8 13.7 - - 2.1 401.8

Wynn Resorts Ltd USD 15.3 123.09 12.3 13.8 39.3 30.3 6.9 137.3

Average 11.5 13.4 30.8 24.1 4.4 219.8

Genting Hong Kong Ltd USD 3.1 0.395 27.8 31.4 30.4 17.2 1.6 31.0

Source: Bloomberg


26

Figure 36: DCF valuation for Travellers

(US$ m) FY11F FY12F FY13F FY14F FY15F FY16F FY17F FY18F FY19F FY20F

FCF 5 42 126 279 331 443 562 606 626 645

PV of FCF 4 35 98 199 217 268 312 309 294 278

Terminal Value 4,974

PV of Terminal Value 2,147

Firm Value 4,162

Less: Net Debt/(Cash) -80

Equity Value 4,242

Key Assumptions

Discount Rate 8.8%

Terminal Growth Rate 3.0%


Figure 37: Sensitivity analysis of Travellers’ value attributable to GenHK

Discount Rate

0.25 7.0% 8.0% 8.8% 10.0% 11.0% 12.0%

Terminal Growth Rate

0% 0.28 0.23 0.20 0.17 0.15 0.14

1% 0.30 0.25 0.22 0.18 0.16 0.14

2% 0.34 0.27 0.23 0.19 0.16 0.14

3% 0.39 0.30 0.25 0.20 0.17 0.15

4% 0.48 0.34 0.28 0.21 0.18 0.15

5% 0.66 0.42 0.32 0.23 0.19 0.16


Figure 38: Sensitivity analysis of GenHK’s target price

Discount Rate

0.25 7.0% 8.0% 8.8% 10.0% 11.0% 12.0%

Terminal Growth Rate

0% 0.57 0.52 0.50 0.46 0.44 0.43

1% 0.60 0.54 0.51 0.47 0.45 0.43

2% 0.63 0.56 0.52 0.48 0.45 0.43

3% 0.68 0.59 0.54 0.49 0.46 0.44

4% 0.77 0.63 0.57 0.50 0.47 0.45

5% 0.95 0.71 0.61 0.53 0.48 0.45


Figure 39: Scenario analysis of Travellers’ DCF value GenHK’s

Target

Price

DCF Value

Attributable

to GenHK

Scenario

Analysis FY11F FY12F FY13F FY14F FY15F FY16F FY17F FY18F FY19F FY20F

US$0.54 US$0.25

Base Case

No. of Tables 300 300 450 500 550 800 1,000 1,000 1,000 1,000

No. of Slots 1,600 1,600 2,800 3,000 3,200 3,600 4,000 4,000 4,000 4,000

US$0.74 US$0.45

Best Case

No. of Tables 300 300 450 650 950 1,150 1,400 1,600 1,800 2,000

No. of Slots 1,600 1,600 2,800 3,600 4,000 4,400 4,800 5,600 6,400 7,000

US$0.46 US$0.17

Worst Case

No. of Tables 300 300 450 500 550 575 600 600 600 600

No. of Slots 1,600 1,600 2,800 3,000 3,200 3,200 3,200 3,200 3,200 3,200



27

Risks

Change in consumer travel preferences and patterns

The appeal of cruises lies in the ability of the cruise operator to innovate its

products to suit consumer preferences. If other more attractive travel

alternatives were to emerge, GenHK’s cruise business could be affected. That

said, travel preferences also hinge on individual tastes and perception and these

factors are not controllable because travel patterns are constantly evolving.

Increase in oil prices

Fuel costs make up at least 10% of cruise operating expenses. Increase in oil

prices will drive operating costs up, but the hike may not be passed on easily to

consumers without the risk of losing businesses.

Weather, seasonality and political events

The cruise business is dependent on weather and sea conditions. During

particular seasons and/or under adverse weather conditions, it will not be

possible to operate the business as per normal conditions. This could affect sales

volume. Events that affect tourism, such as terrorism, may also deal a blow to the

cruise industry.

Competition from new casinos

The casino scene in Asia has been heating up with the opening of several new

casinos. This could dilute the market for each operator. Moreover, land-based

casinos may be competing for the same pool of customers that frequent the

cruise-based casino operations.

Government policies

Casino operations are heavily regulated. Being able to secure a licence is as

important as understanding the tax regime under which the casino will operate.

Regulation on casino operations, for example, junket operations, may also have

an impact on earnings. There is also a need to address and tackle social problems

that may arise from gambling addiction.


28

Company profile

Genting Hong Kong (GenHK) is in the leisure, entertainment and hospitality

business. It was incorporated in September 1993 and was formerly known as Star

Cruises Limited. It operates luxury cruises and cruise-related activities under the

Star Cruises and Norwegian Cruise Line (NCL) brands. The company owns an

operating fleet of 15 ships, cruising to over 200 destinations worldwide. Star

Cruises and NCL combined stand as the third-largest cruise operator in the world.

In addition, GenHK recently ventured into land-based activities through Resorts

World Manila (RWM).

GenHK is listed on the Hong Kong Stock Exchange and is traded on the Quotation

and Execution System for Trading of the Singapore Exchange.

Star Cruises

A 100%-owned subsidiary, Star Cruises owns a fleet of eight ships. Three are laid-

up and could be sold, while a fourth is on charter to NCL. The rest are operating

ships. Star Cruises offers cruise itineraries to various regions in the Asia Pacific,

including Singapore, Malaysia, Hong Kong, Taiwan and Thailand. Its cruises have a

strong tinge of gaming, which generates almost 60% of its revenue. In

comparison, a normal cruise operator like NCL, its associate, derives 70% of its

revenue from passenger ticket sales.

Figure 40: Star Cruises’ fleet and current operating routes

Gross Tonnes Berths Routes and destinations

SuperStar Virgo 76,800 1,804 Singapore, Malaysia

SuperStar Libra 42,276 1,472 Penang, Phuket, Krabi

SuperStar Aquarius 51,039 1,529 Hong Kong, moving to Taiwan

Star Pisces 40,053 1,168 Penang, moving to Hong Kong

MegaStar Aries 3,341 66 Laid-up

MegaStar Taurus 3,341 66 Laid-up

Norwegian Dream 50,764 1,747 Laid-up

Norwegian Sky 77,104 2,002 On charter to NCL

344,718 9,854


Norwegian Cruise Line

NCL was a 100%-owned subsidiary of GenHK before private equity players Apollo

Management and TPG Capital together acquired a 50% stake for US$1b in 2008.

Since then, it has been accounted for as an associate in GenHK’s balance sheet.

NCL is a leading North American cruise operator with cruises to the US and

Europe. It operates 11 cruise ships and has one of the youngest fleets in the

North American cruise market. Another two cruise ships are on order for delivery

in 2013 and 2014. Each has a berth capacity of 4,000 and gross tonnage of

143,500.


29

Figure 41: NCL’s fleet and current operating routes

GRT Berths Routes

Norwegian Epic 155,873 4,100 Caribbean & Europe

Norwegian Dawn 92,250 2,244 Bermuda, Caribbean, Canada & New England

Norwegian Gem 93,530 2,394 Bahamas, Bermuda & Caribbean

Norwegian Jade 93,558 2,402 Europe

Norwegian Jewel 93,502 2,376 Bahamas & Caribbean

Norwegian Pearl 93,530 2,394 Alaska, Caribbean, Pacific Coastal & Panama Canal

Norwegian Sky 77,104 2,002 Bahamas

Norwegian Spirit 75,338 2,018 Caribbean & Bermuda

Norwegian Star 91,740 2,348 Mexico, Pacific Coastal & Panama Canal

Norwegian Sun 78,309 1,936 Bahamas, Caribbean & Europe

Pride of America 80,439 2,138 Hawaii

1,025,173 26,352


Resorts World Manila

GenHK also owns a 50% stake in Travellers International Hotel Group Inc through

a joint partnership with Alliance Global Group. Travellers develops and operates

Resorts World Manila (RWM) in the Philippines, the country’s first integrated

leisure and entertainment complex. Other than a world-class casino, RWM

features several renowned international and luxury hotels, a shopping mall and

movie theatres. It had a soft launch on 28 August 2009. Travellers has been

awarded a gaming licence in the Philippines to operate up to 2,000 tables and

7,000 slots in two sites in Manila. It is currently building a second integrated

entertainment city with casino facilities at the Bagong Nayong Pilipino-Manila Bay

Integrated City.

Figure 42: Location of Resorts World Manila

Source: RWM website


30

Figure 43: Genting Group’s shareholding structure


Figure 44: Genting Hong Kong’s shareholding structure


Genting Hong Kong

Cruise

Star Cruises

(100%)

NCL Corporation

(50%)

Leisure, hospitality, entertainment & gaming

My Inn (Hangzhou) Hotel Co Ltd (100%)

Suzhou My Inn Hotel Co Ltd

(100%)

Macau Land Investment Corp

(75%)

Travellers International Hotel Group Inc (50%)

Others

Suzhou Trip-X Info Tech Co Ltd

(100%)

Genting Star (Shanghai) Edu Information Consulting Co (100%)

Tan Sri Lim Kok Thay & Family

(39.6%)

Genting Berhad

Genting Malaysia

(48.6%)

Genting Singapore

(51.7%)

Genting Plantations

(54.6%)

Genting UK

(100%)

Resorts World at Sentosa Pte Ltd

(100%)

(60.4%)

Genting Hong Kong

(19.3%)


31

Key management

Tan Sri Lim Kok Thay, Chairman and Chief Executive Officer

Tan Sri Lim has been with GenHK since the company was formed in 1993. He is

also the Executive Chairman of Genting Singapore, Chairman and Chief Executive

of Genting Berhad, Chairman and Chief Executive of Genting Malaysia and a

director and Chief Executive of Genting Plantations. He and his family own about

39.6% of the Genting Group and also 60.4% in GenHK. Tan Sri Lim was involved in

the development of many of the resorts under the Genting Group. He holds a

Bachelor of Science (Civil Engineering) degree from the University of London and

also attended the Program for Management Development at the Harvard

Graduate School of Business.

Mr David Chua Ming Huat, President

Mr Chua has been the President of GenHK since May 2007 and was the chief

operating officer of Genting Berhad prior to his appointment as President. He has

also held several key management positions in international securities companies

in Malaysia, Singapore and Hong Kong; hence, his extensive knowledge of

securities, futures, derivatives trading, asset management and corporate finance.

He holds a Bachelor of Arts degree in Political Science and Economics from the

Carleton University, Ottawa, Canada.

Mr Blondel So King Tak, Chief Operating Officer

Mr So was the chief financial officer of GenHK until his appointment as Chief

Operating Officer in October 2009. He has more than 23 years of experience in

the financial sector and has held a number of positions in multinational

corporations and listed companies in Hong Kong. He has a bachelor’s degree in

mathematics from Simon Fraser University, Canada, a post-graduate certificate in

professional accounting from City University of Hong Kong and a master’s degree

in corporate finance from Hong Kong Polytechnic University.

Mr William Ng Ko Seng, Chief Operating Officer – Cruise

Mr Ng was with Genting Singapore from 1987 before joining GenHK in 1994. He

had also been in public practice with international accounting firms in the UK and

Malaysia. He is a Fellow of the Institute of Chartered Accountants in England and

Wales, a Fellow of the Hong Kong Institute of Certified Public Accountants and an

associate of both the Institute of Chartered Accountants in Australia and the

Malaysian Institute of Accountants. Mr Ng also holds a Master of Arts degree in IT

from Macquarie University in Sydney, Australia.

Ms Tan Wei Tse, Chief Financial Officer

Ms Tan was the Senior VP of Corporate Finance before she was appointed as

Chief Financial Officer. She held various positions in financial advisory, corporate

finance, investment banking and asset management in Hong Kong and Malaysia.

She graduated with a degree in accounting from the University of Hull, the UK,

and is a member of the Institute of Chartered Accountants in England and Wales.


32

Profit and loss

YE Dec (US$m) 2008 2009 2010F 2011F 2012F

Sales 441.0 376.8 392.6 424.9 434.1

Cost of goods sold (372.6) (291.2) (288.2) (302.9) (302.8)

Gross Profit 68.4 85.6 104.4 122.0 131.3

Operating expenses (84.6) (80.3) (65.4) (65.8) (67.0)

Operating Profit (16.2) 5.3 39.0 56.2 64.3

Net interest (25.4) (24.0) (26.0) (23.9) (23.6)

Interest income 3.2 0.2 2.6 5.8 7.9

Interest expense (28.6) (24.2) (28.6) (29.7) (31.5)

Net investment income/(loss) 0.0 0.0 0.0 0.0 0.0

Net other non-op. JV+Assoc. (102.6) 21.1 49.4 143.0 163.1

Net extraordinaries (99.9) (28.6) 0.0 0.0 0.0

Pretax income (97.6) (24.0) 76.8 175.2 203.8

Income taxes (3.5) (4.3) (1.3) (2.9) (3.5)

Minority Interest (21.0) (2.9) 0.6 3.4 3.9

Net profit (80.1) (25.3) 74.9 168.9 196.3

EBITDA 50.9 83.8 108.0 123.5 128.6

Adjusted EBITDA 100.6 240.8 370.0 461.5 492.4

EPS (US cts) (1.1) (0.3) 1.0 2.3 2.6


Balance sheet

YE Dec (US$m) 2008 2009 2010F 2011F 2012F

Total assets 2,568.5 2,602.3 2,717.5 2,913.6 3,177.6

Current assets 621.9 394.3 500.7 600.7 746.0

Cash & ST investment 112.1 137.6 272.0 367.2 511.2

Inventories 5.4 5.4 5.5 5.8 5.8

Accounts receivable 311.7 53.0 53.9 58.4 59.6

Others 192.7 198.4 169.3 169.3 169.3

Other assets 1,946.6 2,208.0 2,216.8 2,312.8 2,431.6

LT investments 981.5 1,063.1 1,106.0 1,249.4 1,412.5

Net fixed assets 708.2 1,101.0 1,052.1 1,004.7 960.4

Others 257.0 43.9 58.7 58.7 58.7

Total liabilities 677.6 730.4 758.6 789.1 851.8

Current liabilities 207.4 248.1 240.8 269.1 281.8

Accounts payable 138.2 137.1 137.6 148.0 150.6

ST borrowings 54.0 98.7 86.1 103.8 113.8

Others 15.1 12.3 17.1 17.3 17.4

Long-term liabilities 470.2 482.3 517.8 520.0 570.1

Long-term debts 467.0 480.0 516.7 518.9 569.0

Others 3.3 2.2 1.1 1.1 1.1

Shareholder's equity 1,845.1 1,827.7 1,913.8 2,075.6 2,275.8

Paid-in capital 742.6 742.6 742.6 742.6 742.6

Reserve 1,102.5 1,085.1 1,171.1 1,333.0 1,533.2

Minority Interest 45.8 44.2 45.2 48.9 49.9


Cash flow YE Dec (US$m) 2008 2009 2010F 2011F 2012F

Operating cash flow 6.7 25.5 112.4 95.5 103.9

Net profit (101.1) (28.3) 75.5 172.3 200.2

Depreciation & amortisation 67.1 78.5 68.9 67.3 64.3

Change in working capital (14.3) (40.0) (0.6) 5.7 1.3

Others 54.9 15.3 (31.5) (149.9) (162.0)

Investment cash flow (93.3) (62.0) (2.1) (20.0) (20.0)

Net capex 80.8 (11.8) (20.0) (20.0) (20.0)

Change in LT investment (174.1) (50.2) 7.9 0.0 0.0

Change in other assets 0.0 0.0 10.0 0.0 0.0

Cash flow after invt. (86.6) (36.5) 110.3 75.5 83.9

Financing cash flow 50.7 60.6 24.1 19.8 60.1

Change in share capital 0.0 0.0 0.0 0.0 0.0

Net change in debt 118.5 (84.3) 24.1 19.8 60.1

Change in other LT liab. (67.8) 144.9 0.0 0.0 0.0

Net cash flow (35.9) 24.1 134.4 95.3 144.0


Key ratios YE Dec 2008 2009 2010F 2011F 2012F

Growth (% YoY)

Sales (82.9) (14.6) 4.2 8.2 2.2

OP (119.2) (132.7) 635.1 43.9 14.5

EBITDA (84.5) 64.6 28.9 14.4 4.1

NP (49.7) (72.0) (367.0) 128.1 16.2

EPS (61.0) (68.4) (395.6) 125.5 16.2

Profitability (%)

Gross margin 15.5 22.7 26.6 28.7 30.2

Operating margin (3.7) 1.4 9.9 13.2 14.8

EBITDA margin 11.5 22.2 27.5 29.1 29.6

Net Profit margin (18.2) (6.7) 19.1 39.8 45.2

ROA (1.8) (1.0) 2.8 6.0 6.4

ROE (4.2) (1.4) 4.0 8.5 9.0

Stability

Gross debt/equity (%) 0.3 0.3 0.3 0.3 0.3

Net debt/equity (%) 0.2 0.2 0.2 0.1 0.1

Int. coverage (X) (0.6) 0.2 1.4 1.9 2.0

Int. & ST debt coverage (X) (0.2) 0.0 0.3 0.4 0.4

Cash flow int. coverage (X) 0.2 1.1 3.9 3.2 3.3

Cash flow int. & ST debt (X) 0.1 0.2 1.0 0.7 0.7

Current ratio (X) 3.0 1.6 2.1 2.2 2.6

Quick ratio (X) 3.0 1.6 2.1 2.2 2.6

Net debt (US$m) 408.9 441.1 330.9 255.4 171.5

Per share data (US cts)

EPS (1.1) (0.3) 1.0 2.3 2.6

CFPS 0.1 0.3 1.5 1.3 1.4

BVPS 24.8 24.6 25.8 27.9 30.6

SPS 5.9 5.1 5.3 5.7 5.8

EBITDA/share 0.7 1.1 1.5 1.7 1.7

Adj. EBITDA/share 1.4 3.2 5.0 6.2 6.6

DPS 0.0 0.0 0.0 0.0 0.0


ANALYSTS’ COVERAGE / RESEARCH OFFICES

33

SINGAPORE Stephanie WONG Head of Research

Regional Head of Institutional Research

+65 6432 1451 [email protected]

� Strategy

� Small & Mid Caps

Gregory YAP


� Conglomerates

� Technology & Manufacturing

� Transport & Telcos

Rohan SUPPIAH


� Airlines

� Marine & Offshore

Wilson LIEW


� Hotel & Resort

� Property & Construction

Anni KUM


� Conglomerates

� REITs

James KOH


� Finance & Banking

� Logistics

� Resources

Eric ONG


� Marine & Offshore

� Energy

OOI Yi Tung


� Property & Construction

YEAK Chee Keong, CFA


� Retail & Consumer

� Engineering

� Infrastructure

HONG KONG / CHINA Edward FUNG Head of Research


� Power

� Construction

Ivan CHEUNG


� Property

� Industrial

Ivan LI


� Banking & Finance

Jacqueline KO


� Consumer Staples

Robert WANG


� Auto

Andy POON


� Telecom & related services

Samantha KWONG


� Consumer Discretionaries

Alex YEUNG


� Industrial

INDIA Jigar SHAH Head of Research

+91 22 6623 2601 [email protected]

� Oil & Gas

� Transportation

Anubhav GUPTA


� Property

� Capital goods

Rohit LEDWANI

+91226623 2625 [email protected]

� Banking and Financial services

Nikhil AGARWAL


� Cement

� Metals

Haripreet BATRA


� Software

� Education

Ganesh RAM


� Telecom

� Media

MALAYSIA YEW Chee Yoon Head of Research


� Strategy

� Banks

� Telcos

� Property

� Conglomerates & others

LIEW Mee Kien


� Gaming

� Media

� Power

� Construction

Research Team

+603 2141 1555

� Food & Beverage

� Manufacturing

� Plantations

� Tobacco

� Technology

INDONESIA Katarina SETIAWAN Head of Research


� Consumer

� Infra

� Shipping

� Strategy

� Telcos

� Others

Ricardo SILAEN


� Auto

� Energy

� Heavy Equipment

� Property

� Resources

Rahmi MARINA


� Banking

Lucky ARIESANDI, CFA


� Cement

� Construction

� Pharmaceutical

� Retail

Adi N. WICAKSONO


� Generalist

Arwani PRANADJAYA


� Technical analyst

VIETNAM Nguyen Thi Ngan Tuyen

+84 838 38 66 36 x 163 [email protected]

� Pharmaceutical

� Confectionary and Beverage

� Oil and Gas

Ngo Bich Van


� Bank

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Nguyen Quang Duy


� Shipping

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Trinh Thi Ngoc Diep


� Property

� Construction

THAILAND Kanchan KHANIJOU

+ 662 658 6300 x 4750 [email protected]

� Banks

� Construction Materials

Nathavut SHIVARUCHIWONG

+ 662 658 6300 x 4730 [email protected]

� Property

� Shipping

PHILIPPINES Luz LORENZO Head of Research


� Strategy

� Property

� Telcos

Laura DY-LIACCO


� Utilities

� Conglomerates

Lovell SARREAL


� Consumer

� Media

� Cement

Kenneth NERECINA


� Conglomerates

� Ports/ Logistics

Katherine TAN


� Banks

� Construction

REGIONAL Luz LORENZO Economist


� Economics

ONG Seng Yeow


� Regional Products & Planning

TAIWAN Gary Chia

Head of Greater China Research


Boris Markovich

COO, Greater China Research


John Brebeck, CFA

Head of Taiwan Strategy

Head of Research, Taiwan


George Chang, CFA

Head of Upstream Tech


Vincent Chen

Head of Downstream Tech


Dennis Chan – NB Supply Chain


Andrew C Chen – IC Backend


Ellen Chiu – Taiwan Consumer


Danny Ho – Taiwan Petrochemical


Min Li – Alternative Energy


May Lin – Taiwan Telecom


Tess Wang – Taiwan Financials


Recommendation definitions

Our recommendation is based on the

following expected price

performance within 12 months:

+15% and above: BUY

-15% to +15%: HOLD

-15% or worse: SELL


34

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35

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Singapore 038989

Tel: +65 6336 9090

Fax: +65 6339 6003

LAU Wai Kwok (sales)

[email protected]

Stephanie WONG (research)

[email protected]

London Kim Eng Securities (London) Ltd

6/F, 20 St. Dunstan’s Hill

London EC3R 8HY, UK

Tel: +44 20 7621 9298

Dealers’ Tel: +44 20 7626 2828

Fax: +44 20 7283 6674

Giles WALSH (sales)

[email protected]

Geoff HO (sales)

[email protected]

James JOHNSTONE (sales)

[email protected]

New York Kim Eng Securities USA Inc

406, East 50th

Street

New York, NY 10022, U.S.A.

Tel: +1 212 688 8886

Fax: +1 212 688 3500

Thanh C NGUYEN (sales & trading)

[email protected]

Taiwan Yuanta Securities Investment

Consulting Co.

10/F, No 225, Nanking East Rd

Section 3

Taipei 104, Taiwan

Tel: +886 2 8770-6078

Fax: +886 2 2546-0376

Arthur LO (sales)

[email protected]

Gary CHIA (research)

[email protected]

Hong Kong Kim Eng Securities (HK) Ltd

Level 30,

Three Pacific Place,

1 Queen’s Road East,

Hong Kong

Tel: +852 2268 0800

Fax: +852 2877 0104

Ray LUK (sales)

[email protected]

Edward FUNG (research)

[email protected]

Thailand Kim Eng Securities (Thailand)

Public Company Limited

999/9 The Offices at Central World,

20th

- 21st Floor,

Rama 1 Road, Pathumwan,

Bangkok 10330, Thailand

Tel: +66 2 658 6817 (sales)

Tel: +66 2 658 6801 (research)

Vikas KAWATRA (sales)

[email protected]

Indonesia PT Kim Eng Securities

Plaza Bapindo

Citibank Tower 17th

Floor

Jl Jend. Sudirman Kav. 54-55

Jakarta 12190, Indonesia

Tel: +62 21 2557 1188

Fax: +62 21 2557 1189

Harianto LIONG (sales)

[email protected]

Katarina SETIAWAN (research)

[email protected]

Malaysia Kim Eng Research Sdn Bhd

16/F, Kompleks Antarabangsa

Jalan Sultan Ismail

50250 Kuala Lumpur, Malaysia

Tel: +603 2141 1555

Fax: +603 2141 1045

YEW Chee Yoon (research)

[email protected]

Philippines ATR-Kim Eng Securities Inc.

17/F, Tower One & Exchange Plaza

Ayala Triangle, Ayala Avenue

Makati City, Philippines 1200

Tel: +63 2 849 8888

Fax: +63 2 848 5738

Lorenzo ROXAS (sales)

[email protected]

Luz LORENZO (research)

[email protected]

Vietnam Kim Eng Vietnam Securities Joint Stock

Company

1st Floor, 255 Tran Hung Dao St.

District 1

Ho Chi Minh City, Vietnam

Tel : +84 838 38 66 36

Fax : +84 838 38 66 39

Vo Doan Trang (sales)

[email protected]

Nguyen Thi Ngan Tuyen (research)

[email protected]

India Kim Eng Securities India Pvt Ltd

2nd Floor, The International,

Plot No.16, Maharishi Karve Road,

Churchgate Station,

Mumbai City - 400 020, India

Tel: +91.22.6623.2600

Fax: +91.22.6623.2604

Vikas KAWATRA (sales)

[email protected]

Jigar SHAH (research)

[email protected]

South Asia Sales Trading Connie TAN

[email protected]

Tel: +65 6333 5775

US Toll Free: +1 866 406 7447

North Asia Sales Trading Eddie LAU

[email protected]

Tel: +852 2268 0800

US Toll Free: +1 866 598 2267

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