We understand that Australian casinos have raised their VIP commission rates by about 0.2ppt to about 1.4ppt. Keener regional competition could be slightly negative for GENS and GENM (GENM MK/RM2.89/BUY/Target Price: RM3.26). Although Australia hosts a relatively small market (US$500-600m), it is still a significant part of GENS' target market.

Maintain Hold. Despite the potential upside to RWS' earnings, we conservatively maintain our HOLD recommendation on GENS pending better visibility of RWS' operating performance. Momentum investors may want to grab this opportunity to take profit on GENS, amid the peakish market outlook and the stock's slightly stretched valuations. Our fair price of S$0.95 is based on DCF valuations (cost of equity of 9.2% and zero terminal growth after the concession period). We prefer GENS' parent Genting Berhad (GENT MK/RM7.28/Target Price: RM7.60) as a much cheaper exposure into RWS. Our sensitivity table suggests that GENT would be worth about RM8.24 should GENS' share price remain at present levels.