DJ MARKET TALK: Galaxy Rally Overdone; Fund-Raising Overhang - CS
Credit Suisse says Galaxy Entertainment's (0027.HK) strong run since announcing US$170 million bond repurchase "overdone."
Keeps Neutral call, but raises target price to HK$1.12 vs HK$1.00, mostly reflecting valuation gain from bond repurchase.
Says cash flow from StarWorld, plus existing cash on hand of about HK$5.6 billion would not be enough to satisfy outstanding capex of HK$7.5 billion for Cotai Mega Resorts, not to mention outstanding debt of HK$5.5 billion, thus believes Galaxy will need to raise more capital in 2009, which will be major overhang. Galaxy +2.5% at HK$1.25 midday
Source: Dow Jones Newswire