Genting Hong Kong posts good growth profile in Q1 2011

According to International Financial Review Asia, Travellers International, the operator of Resorts World Manila (RWM), could be planning an initial public offering. While GENHK did not comment on this piece of news, we see it as a positive development that could unlock the hidden value of Travellers. A public listing would also provide more clarity on the operating data of its casino business.

Norwegian Cruise Line (NCL), on the other hand, could push back its listing until next year, in our opinion, given the current weak market conditions. We do not think this is a negative as it is possible that NCL could receive a higher valuation if supported by improved operating figures coupled with potentially better equity market conditions next year.

NCL’s 1Q11 results, released in May, showed a 37.5% YoY increase in adjusted EBITDA to US$81.9m, in line with our expectation. Despite a 6.6% rise in fuel price, the cruise operator registered a 1.3% YoY drop in net cruise cost per capacity day, owing to pricing discipline, cost control and economies of scale. This indicates that the cruise business is indeed improving. However, if oil prices continue to head north, NCL would inevitably feel some margin pressure.