Genting Singapore is reported to be in talks with the Osaka government on plans for a 500b yen (US$4.8b) casino resort.

Although the Japanese government has yet to pass the legislation, Osaka Prefecture Governor Ichiro Matsui was quoted as saying “it’s a matter of time before casinos are legalized”.

No doubt that Genting has expressed interest in developing and operating an IR in Japan, we note that it will still be quite some time before these casinos in Japan materialize. Furthermore, the article (attached below) also reported that all the major gaming companies like Caesars, MGM and LV Sands are also in discussions with the Osaka government, suggesting that the competition for the initial project is likely to be very keen indeed.

For now, we maintain our HOLD rating and S$1.48 fair value.

Note that Genting will be announcing its 4Q13 results on 20 Feb after market close.

Source: OCBC Research - 22 Jan 2014