Nomura Securities on Macau Gaming: July Month-to-Date - Typhoon Impact
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Price: $46.58 --0%
Rating Summary:
21 Buy, 17 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 7 | Down: 10 | New: 19
Rating Summary:
21 Buy, 17 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 7 | Down: 10 | New: 19
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Nomura Securities on Macau Gaming: July Month-to-Date
Analyst, Harry C. Curtis, said, "This week’s numbers were non-comparable due to the typhoon (signal 10), which disrupted demand for at least 2 days. The first 29 days of July gaming revenues imply ~MOP24bn for the month, which would imply a decline of ~1% YoY. While it is difficult to estimate the impact from the typhoon, assuming average daily table win had remained at prior week’s level of HKD769m, July could have been up ~2% YoY. July and August face tough comps and thus far July trends suggest that revenue growth would be a bit weaker than our muted expectations of 5-6% growth The current run rate implies July VIP could decline ~5% YoY, though July 2011 hold was higher than average. In our view, average daily revenue needs to increase to ~HK$800 for the larger cap gaming stocks to attract investor (vs. trader) attention."
"Longer term, we remain 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 (~10% yield) on 2013E free cash flow."
Analyst, Harry C. Curtis, said, "This week’s numbers were non-comparable due to the typhoon (signal 10), which disrupted demand for at least 2 days. The first 29 days of July gaming revenues imply ~MOP24bn for the month, which would imply a decline of ~1% YoY. While it is difficult to estimate the impact from the typhoon, assuming average daily table win had remained at prior week’s level of HKD769m, July could have been up ~2% YoY. July and August face tough comps and thus far July trends suggest that revenue growth would be a bit weaker than our muted expectations of 5-6% growth The current run rate implies July VIP could decline ~5% YoY, though July 2011 hold was higher than average. In our view, average daily revenue needs to increase to ~HK$800 for the larger cap gaming stocks to attract investor (vs. trader) attention."
"Longer term, we remain 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 (~10% yield) on 2013E free cash flow."
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