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.