Nomura Securities on Macau Gaming: August Gaming Revenues; September Outlook (LVS, MGM, WYNN)
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Rating Summary:
18 Buy, 7 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 18 | Down: 33 | New: 12
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Nomura Securities on Macau Gaming: August Gaming Revenues
Analyst, Harry Curtis, said, "For the 5 days ending 8/31, average daily table run rate slowed to HKD620m (based on only five week days) vs. prior week of HKD775m (based on a full week). The sequential slow down can be attributed to: 1) no weekend days were included in this week’s average (weekend days typically generate above-average daily revenues); and 2) seasonal slowdown in visitation as we near the end of summer. If the weekend were included, we estimate the run rate could increase to ~HKD655m."
"August revenues were MOP26.1b, or up 5.5%, which is just below Nomuar’s expectation of 7%. They estimate VIP revenues were down 2-3% (which does not adjust for any potential hold impact), mass table revs were up 22-26% and slot revenues were up 54."
"LVS is the biggest beneficiary of mass growth, as it has the most mass capacity in Macau among the large-cap names under their coverage. Nomura believes that, as long as LVS’s mass growth rate paces in line with or ahead of the market, investors will react positively to the stock."
"Nomura has been saying that Sept faces an easy comp (Sept 2011 had below-average VIP hold) and they are looking for low-to-mid teen growth for the month. On an absolute level, Sept will be down sequentially due to seasonality, and Nomura is looking for average daily table run rate of ~HKD740 vs. HKD775m for the full month of Aug. Keep in mind Sands Cotai Central Phase 2A is expected to open on Sept 20. They expect comps to be tougher for Oct-Dec."
"Longer term, Nomura remains constructive on Las Vegas Sands (NYSE: LVS), MGM (NYSE: MGM) and Wynn (Nasdaq: WYNN) (all Buy-rated) for several reasons: 1) positive supply/demand imbalance; 2) infrastructure improvements to Macau; 3) more optimistic China macro outlook (our China economist believes that the likelihood of a hard landing in China is low, and he expects GDP growth to rebound moderately in H2’12, helped by modest easing in 2012); and 4) valuations that look attractive (~8-10% yield) on 2013E free cash flow for LVS and WYNN."
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Analyst, Harry Curtis, said, "For the 5 days ending 8/31, average daily table run rate slowed to HKD620m (based on only five week days) vs. prior week of HKD775m (based on a full week). The sequential slow down can be attributed to: 1) no weekend days were included in this week’s average (weekend days typically generate above-average daily revenues); and 2) seasonal slowdown in visitation as we near the end of summer. If the weekend were included, we estimate the run rate could increase to ~HKD655m."
"August revenues were MOP26.1b, or up 5.5%, which is just below Nomuar’s expectation of 7%. They estimate VIP revenues were down 2-3% (which does not adjust for any potential hold impact), mass table revs were up 22-26% and slot revenues were up 54."
"LVS is the biggest beneficiary of mass growth, as it has the most mass capacity in Macau among the large-cap names under their coverage. Nomura believes that, as long as LVS’s mass growth rate paces in line with or ahead of the market, investors will react positively to the stock."
"Nomura has been saying that Sept faces an easy comp (Sept 2011 had below-average VIP hold) and they are looking for low-to-mid teen growth for the month. On an absolute level, Sept will be down sequentially due to seasonality, and Nomura is looking for average daily table run rate of ~HKD740 vs. HKD775m for the full month of Aug. Keep in mind Sands Cotai Central Phase 2A is expected to open on Sept 20. They expect comps to be tougher for Oct-Dec."
"Longer term, Nomura remains constructive on Las Vegas Sands (NYSE: LVS), MGM (NYSE: MGM) and Wynn (Nasdaq: WYNN) (all Buy-rated) for several reasons: 1) positive supply/demand imbalance; 2) infrastructure improvements to Macau; 3) more optimistic China macro outlook (our China economist believes that the likelihood of a hard landing in China is low, and he expects GDP growth to rebound moderately in H2’12, helped by modest easing in 2012); and 4) valuations that look attractive (~8-10% yield) on 2013E free cash flow for LVS and WYNN."
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