Maybank Kim Eng analyst Yin Shao Yang has kept his “buy” call and $1.16 target price on Genting Singapore,
Mayoral elections are round the corner in Yokohama, where Genting Singapore is in a joint venture to bid for its next big project.
Now, even as the majority of candidates are opposed to having the IR, Maybank Kim Eng analyst Yin Shao Yang is for now keeping his “buy” call and $1.16 target price on the stock.
See also: Upcoming mayor election poses risk to Genting Singapore’s bid for Yokohama integrated resort: RHB
According to Yin in his Aug 9 note, public sentiment in Yokohama does not favour having the IR. However, with the anti-IR camps split, the pro-IR incumbent “may just win”.
“If this were to happen, we maintain our view that Genting Singapore-Sega Sammy will prevail in the Yokohama IR request for proposal process. In our view, there is little downside risk as we gather that the market has not imputed any upside potential from a Yokohama IR,” notes Yin.
Out of the eight candidates in the run for the Aug 22 election, six are anti-IRs and the remaining two for. “That said, pundits reckon that there are only five candidates that carry real heft,” writes Yin, listing Fumiko Hayashi, the pro-IR incumbent, as one of these five.
“Channel checks reveal that if Ms Hayashi prevails, the winner of the Yokohama IR RFP process will be announced soon after,” adds Yin, whose $1.16 target price is based on a discounted-cash-flow model that includes a 30 cents per share contribution from a 50% ownership of the Yokohama IR.
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Genting Singapore close Aug 6 at 79 cents, down 0.63% for the day and down 8.14% year to date.
