May 6 (Bloomberg) -- Genting Singapore Plc posted their biggest jump in three months after Southeast Asia’s largest casino operator by market value reported first-quarter profit almost doubled.
Genting climbed 2.7 percent to S$1.345 in Singapore, the biggest one-day gain since Feb. 7. Net profit surged 97 percent to S$228.49 million ($183 million) in the three months ended March from a year earlier, the company said yesterday in a statement to the Singapore exchange. Revenue rose 24 percent to S$828.83 million, with contributions from its casino on Sentosa island increasing 29 percent to S$671.94 million, it said.
“While management remains cautious about the rest of the year, especially as elections are in the offing in Indonesia and Thailand, and given macro uncertainties in China, we think the street will view these results as a welcome relief after a few disappointing quarters,” Tushar Mohata, an analyst at Nomura Holdings Inc. in Kuala Lumpur, wrote in a note to clients today.
Besides improving earnings, Mohata said Genting’s casino resort project on South Korea’s Jeju island and the potential opening of Japan for gambling operators will provide near-term catalysts for the company’s shares.
Genting said in February that it teamed up with Landing International Development Ltd. to build a $2.2 billion casino resort on Jeju island, with construction to start in July. The resort will initially target visitors from eastern and northern China. The company yesterday said it plans to pursue opportunities in Japan with partners in the country.
Genting’s “share price will continue to be supported by the Japan newsflow,” Vincent Khoo, an analyst at UOB-Kay Hian Holdings Ltd. in Kuala Lumpur, wrote in a note to clients. “The much-anticipated Japan gaming bill will be debated in the Lower House at the end of May.”
UOB Kay Hian and Maybank Kim Eng Holdings Ltd. raised their ratings on the stock to hold from sell, while OCBC Investment Research and AmResearch upgraded to buy from hold, according to data compiled by Bloomberg.
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