Genting Climbs on Plans for $2.2 Billion Korean Casino

Feb. 10 (Bloomberg) -- Genting Singapore Plc and partner Landing International Development Ltd. (582) advanced after announcing plans to develop a $2.2 billion casino resort on South Korea’s Jeju island, targeting Chinese gamblers.

Casino operator Genting Singapore climbed as much as 3.2 percent in Singapore trading. Landing, a Chinese property developer, jumped as much as 27 percent in Hong Kong.

Chinese tourists are the main driver behind casino growth for Macau, which took more than $45 billion in gambling revenue last year. While Chinese normally need visas to go to South Korea, an increasingly popular destination for tourists from the world’s most-populous nation, that requirement is exempted for visits to Jeju.

“By entering into a new market, it could be another earnings booster for Genting,” Grace Chew, a Malaysian-based analyst at HongLeong Investment Bank, wrote in a research note today.

Nomura Holdings Inc. upgraded Genting Singapore to buy today and raised its price target to S$1.62 because of the planned overseas investment. Singapore’s gaming market is “maturing,” Nomura analysts Tushar Mohata and Alpa Aggarwal said in a research note.

Genting Singapore rose 1.8 percent to S$1.415 as of 1 p.m. local time, while Landing jumped 13 percent to 71 Hong Kong cents.

Sentosa Model

Resorts World Jeju will be modeled after Genting’s Resorts World Sentosa, one of Singapore’s two gambling resorts, and will be developed by a 50-50 joint venture formed by the two companies.

Its casino, open only to foreigners, will have 800 tables, including 200 for high-stakes gamblers, Yang Zhihui, chairman of the Chinese company, said at a media briefing on Feb. 7.

It will be built on a site with an area of 2.3 million square meters (25 million square feet) and will have a theme park, a mall, luxury apartments and three hotels with 2,800 rooms, Landing said. Construction is scheduled to begin in June this year, with the first phase set to open in 2017.

About 4.3 million Chinese tourists visited South Korea last year, 53 percent more than in 2012, and making up more than a third of the country’s total, according to data from the Korea Tourism Organization.

The Jeju resort will target visitors from eastern and northern China, Yang said at a press conference in Hong Kong last week.

Eastern and Northern China are “very close to Jeju Island,” Yang said. The regions include the cities of Shanghai, Beijing, Hangzhou, and Qingdao.

Genting Bhd. (GENT), controlled by Malaysian billionaire Lim Kok Thay, is the biggest shareholder in Genting Singapore. The Genting group of companies has been expanding abroad amid restrictions on its home soil, where Muslims are forbidden from gambling under Malaysia’s Shariah laws.

To contact the reporter on this story: Vinicy Chan in Hong Kong at vchan91@bloomberg.net

To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net

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