Expectations for Genting Singapore have been lowered and we think incremental positives such as this news on junket approvals, overseas expansion and market share gains could re-rate the stock. Maintain Outperform with an unchanged SOP-based target price of S$1.85.

Singapore's Casino Regulatory Authority (CRA) has given the go-ahead to two Malaysian junket promoters with an international client base to operate in Singapore. The two approved junket operators, already endorsed by Resorts World Sentosa (RWS), can commence operations immediately. The junket operator licence is valid for a year. Marina Bay Sands (MBS) said it has yet to endorse any junket operator. These junket operators should target only the international market and not Singaporeans or PRs (which we estimate to account for 20-30% of RWS' VIP players).