Be greedy when others are fearful

Be greedy when others are fearful
Although we are projecting a lower 2H, GuocoLeisure’s (GLL) 1HFY6/15 core
earnings were still slightly above our expectation, at 71% of our full-year
forecast. This is due to better cost discipline and slightly earlier-than-expected
debenture refinancing. We raise our FY15 EPS estimate by 4% to reflect lower
operating cost, but cut FY16 by 18% and FY17 by 12% to factor in lower O&G
royalty income from Bass Strait. We believe 1) the fundamentals of GLL’s hotel
segment remain sound and 2) the market has overreacted to the FX and oil
price hiccups. We maintain an Add on GLL, with an unchanged RNAV-based
target price of S$1.18. Key catalysts include expanding hotel earnings and a
potential bounce in oil price.
1HFY15 results highlights
GLL reported revenue of US$200.6m in 1H15, 

Guocoleisure (ADD, TP:S$1.18) - Be greedy when others are fearful 
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