Inphyy Corner

Genting Singapore - 3Q13 as expected; but limited upside

OCBC Investment Research

www.ocbcresearch.com/pdf_reports/company/Genting-131105-OIR.pdf

ThaiBev - Why ThaiBev's non-alcoholic beverage business could still disappoint in 2H

Will losses escalate further?

According to CIMB, it expects Thai Bev to report a stronger 2H, thanks to an uptick in spirits sales volume. The non-alcoholic beverage business is unlikely to turn a profit yet but the quantum of loss depends on the intensity of both Oishi’s and Serm Suk’s promotional activities.

Here's more:

What We Think
We expect Spirits sales volume to increase qoq in 3Q as the destocking effect in the last two quarters should be over.

3Q spirits sales volume is also expected to rise yoy because of the low base effect as the corresponding quarter last year saw the implementation of the hike in excise tax in August.

Spirits sales volume declined by 8% in 1H13, and we expect a gradual pick-up in 2H13, resulting in flat yoy volume growth in FY13.

The impending submission of wholesale prices for the revamped computation of excise taxes might complicate matters, but we understand that the potential impact to consumers at this stage is likely to be a muted 1-2% increase in ASP.

The non-alcoholic beverage segment is not likely to turn a profit yet. We think that the key to narrowing losses at this stage lies with Oishi and the intensity of its promotional war with Ichitan. The losses will narrow if the price wars taper. The intense green tea battle will enter its fifth straight quarter in 3Q and could only ease after Ichitan completes its listing, which is rumoured to be at end-2013.

Further losses at Serm Suk are expected as management continues to spend heavily on A&P to build est Cola’s market share.

What You Should Do
We maintain our Outperform call. We see catalysts from further corporate restructuring.

Specifically, Thai Bev’s plan to sell its 28.6% FCL stake, possibly to TCC, and for TCC to communicate its plans over their 61.7% stake in F&N. Investors should stay invested.

Genting SP - Why Genting Singapore's VIP business recovery could be short-lived

Analyst warns aginst a pullback.

According to CIMB, adjusting for S$40m in one-off property-assessment charges, 3Q13 core net profits were up 59% yoy, fuelled by operating leverage in its VIP business. Its VIP win rate was 2.95% vs. 2.85% in 3Q12 with a 58% yoy increase in betting volume, translating to S$610m in GGR (+89% yoy, +40% qoq).

Management attributed this to a broadening out of its VIP clientele not just in China but also in South-East Asia.

However, CIMB believes its VIP business is ultimately dependent on credit and it is too early to tell whether it has found sustained growth and recovery.

Here's more from CIMB:

4Q12 and 1Q13 saw similar spikes in VIP rolling chip but there was a pullback in 2Q13 when credit was reined in. Trade receivables crossed S$1bn for the first time and we estimate that S$473m in bad debt has been provided for since operations began.

About S$50.2m was provided for in 3Q13 vs. S$31.9m in 2Q13 and S$32m in 3Q12.

Stagnant in mass
Mass GGR was S$409m, down 15% yoy and 10% qoq. Market share for Resorts World Sentosa (RWS) dropped to 44% from 49% in 3Q12.

A 550-room new hotel in the Jurong Lake District will be a key catalyst for RWS as it will cater to tour groups which should help drive yields on its gaming assets during off-peak hours.

Pricing in Japan
We believe based on our assumptions that the share price is factoring in a potential 50% stake for GENS in a
US$10bn IR project in Japan with a ROCE of 15% valued at 12x EV/EBITDA.

This works out to S$0.37/share in RNAV. We believe this represents much of the option value given that we are still very early in the timeline.

Vard - VARD SECURES NEW CONTRACT FOR A SURVEY VESSEL FOR CIRCLE MARITIME INVEST JSC

Singapore, 5 November 2013 – Vard Holdings Limited (“VARD”), one of the major global
designers and shipbuilders of offshore and specialized vessels, is pleased to announce that it
has signed a new contract for the construction of a survey vessel for
Circle Maritime Invest JSC (CMI). The value is approximately NOK 55 million.

The vessel, to be built at Vard Braila shipyard in Romania, will be delivered in 3Q 2014. Over
the past few years, Vard Braila has delivered five icebreaking tugs to CMI. The new vessel, a
survey vessel, is especially equipped for survey operations in the Caspian Sea.

CEO and Executive Director, Roy Reite, at VARD says, “We look forward to building yet another
vessel to Circle Maritime Invest JSC. This new contract gives evidence of the good relationship
we have with our customer in Kazakhstan. Together with CMI, we are excited to follow the
development of the offshore activity in the Caspian Sea.”

The vessel will have a total length of 46 metres and a beam of 13 metres. It will accommodate
22 persons.

Circle Maritime Invest JSC will through its subsidiary Caspian Offshore Construction operate
the new survey vessel in the Caspian Sea. Circle Maritime Invest JSC is a privately-owned
marine service company registered in Kazakhstan.



info.sgx.com/webcoranncatth.nsf/VwAttach...vest.pdf?openelement

Kreuz - PROPOSED ACQUISITION BY SEA9 PTE. LTD. OF ALL THE ISSUED AND PAID-UP ORDINARY SHARES IN THE CAPITAL OF KREUZ HOLDINGS LIMITED BY WAY OF A SCHEME OF ARRANGEMENT

info.sgx.com/webcoranncatth.nsf/VwAttach...2013.pdf?openelement

info.sgx.com/webcoranncatth.nsf/VwAttach...2013.pdf?openelement

Kreuz - REQUEST FOR LIFTING OF TRADING HALT

Date of Lifting of Trading Halt * 06-11-2013
Time of Lifting of Trading Halt * 0830 hours