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Genting Falls as Profit Drops 44 Percent: Singapore Mover

May 3 (Bloomberg) -- Genting Singapore Plc, one of two companies licensed to run casinos in the city state, dropped the most in three years after reporting first-quarter profit plummeted 44 percent.

Genting slid plunged 7.8 percent to S$1.485 at the close in Singapore, the biggest decliner on the Singapore benchmark Straits Times Index, which slid 1 percent.

“Given earnings volatility and low yield, Genting Singapore’s valuation remains less attractive compared to Macau peers,” Aun-Ling Chia, an analyst at Deutsche Bank AG in Kuala Lumpur, wrote in a note to clients published today. The brokerage kept its hold rating on the stock with a share-price forecast of S$1.38.

Genting, which operates the Universal Studios theme park in Singapore, said yesterday profit fell to S$115.9 million ($94 million) in the three months ended March, compared with S$205.5 million a year earlier. Gaming revenue dropped 20 percent to S$521.2 million during the period, surpassing the 8.7 percent decline for rival Marina Bay Sands’s casino revenue to $640.2 million.

OCBC Investment Research cut its rating on the stock to sell from hold. “Genting Singapore has now turned more cautious for the rest of the year, citing a more uncertain global economic outlook, especially with the recent muted economic data coming out of China,” analyst Carey Wong wrote in a note.

Of the 23 brokerages covering Genting, nine recommend selling the stock, nine recommend buying it and five have hold ratings, according to data compiled by Bloomberg.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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