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By:  Professional Ground experts panel

The answer is YES. On the following conditions:

1. That Macau casinos are able to drive a drastic change in their business model from the current one.

2. The casinos must be willing to drastically increase in their costs of customer acquisitions. (There’s no free lunch).

3. They must go beyond the pool of mainland Chinese casino patrons.

4. Drastically improve premium patrons database management and reward system that ticks.

5. Establish what is really “premium mass” casino patrons in which casinos can create a sustainable business… and to grow it big. Casinos need to create HUGE motivational factor that can establish for themselves Big Enough Repeat Customers Pool from this segment.

Up till now, there isn’t a truly successful business model that can grow so called this Premium Mass market segment. Casinos still making big money from the junket segment and the low costs mass market.
Something in between can be a tough nut to crack…

All casinos knew about this.


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By:  Professional Ground panel

The overall results of Sands China and Marina Bay Sands are considered to be in steady growth path.

While Macau may slows down somewhat in the first two quarters, its long term growth in gaming revenue will continue in good pace between 18 ~ 23% on a yearly bssis.

Marina Bay Sands remains on the right path of developing the mid~premium markets in the region. While its very high~end market will remain volatile from quarter to quarter.

This may be the right time to bet on Sands China’s shares, as for the 2nd half of 2014 Macau gaming landscape will perform much better. This predicted trend may push the shares to new heights and continues its winds to 2015.


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Commentary by Professional Ground panel

If the resorts take off, it is envisaged that Singapore casinos and integrated resorts will be heavily impacted.
Macau somewhat will not be affected. Mainland Chinese won’t go to Korea as they definitely prefer the special enclave – Macau.

Reasons: Chinese players won’t want their secretive cross-border money channels to be hampered and compromised. Macau is much safer for junkers. Mass market patrons also prefer to take shorter journey to Macau.
But other East Asia visitors and tourists will switch over to Korea instead of going over to Singapore…


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Local news extracts
Assessment by:  Professional Ground expert panel

Genting Singapore’s 4th quarter (2013) Ebitda reported as S$256m, a drop of 28%. Whole year Ebitda achieved as S$1.173b, a drop of 14%.

Although its casino still hold on to about 20,000 visitors daily, Resorts World casino revenue has dropped 19% over the last quarter.

Yesterday Genting Singapore share price ended at S$1.40

According to its report, though VIP volume (?) increased in the 4th quarter, however the win % was low and hence, affected the overall casino revenue.

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Our recommendation:  SELL.
(The share performance in 2014 will not improve. This is due to poor casino floor efficiency compounded by VIP business lacking consistent high turnover & extremely low win %).
Based on the trends, Singapore casino landscape has saturated. Coupled with very old style of casino management, Genting Singapore will not attain any new breakthrough in their gaming business. They continue to play a second fiddle to Marina Bay Sands.

Quote  —  Posted: February 21, 2014 in Uncategorized

Macau Casino Landscape In 2014

Posted: January 3, 2014 in Uncategorized

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By: Professional Ground experts panel

The above news extracts is pointing to the following scenario:

1. Credit crunch will be easing off starting 2H of 2014.

2. Expanded QFII will bring about greater investment opportunities for casino concept stocks in HONG KONG.

3. ANOTHER round of cash flush to enter Macau enclave in the 2H of 2014

4.  Further opening up of ZhuHai new developments as an integral part of Macau.

5. Significant transition of Macau Cotai Strip to be a more apparent Las Vegas style of entertainment hub in 2014.

It is therefore can be envisaged that casino stocks like Sand China will hit its high at target price of HK$100 likely by end of 2014 or in the 1H of 2015.


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Media report extracts

By:  Professional Ground experts panel

It’s casino performance remains so so, trailing behind Marina Bay Sands.
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If Genting could only rely on Southeast Asian pool of premium casino patrons, it is expected that its VIP business pie is to remain as such – small.

The casino has to constantly rely on credit exposure to merely sustain its rolling chip program.
Notice that its uncollectible debt is piling up…

Japan market? It is A Bridge Too Far for Genting Singapore.

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Betting On Sands China In 2014

Posted: October 30, 2013 in Uncategorized

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An assessment by Professional Ground

30 Oct 2013

Will You Bet? Yes!

We previously had assessed that the share prices of Sands China would advance much further. The recent weeks trending has shown its potential to even do better, into 2014.

Besides the fact that Sands China secures a larger mass market share in Macau enclave, its VIP business arena has also calved for itself a stable income stream with better win % in such volatile environment.

Coupled with gradual loosening of credit by mid 2014 onwards, we expect Sands China to gain more profitable ground then.

Simply put, we set Sands China target price at around HK$65 – 75 region in about 6 to 9 months from now.

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Above:  What others say…


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Media report extract

By:  Professional Ground panel

MBS Pushed Harder On VIP Gaming In its 3rd Qtr

Overall, Marina Bay Sands performed relatively stable in its 3rd quarter casino earning. Achieved slightly better Win % of 2.85% in VIP gaming.

Overall VIP turnover of non-negotiable chips amounts to S$13.8b which is considered OK. (But not fantastic).

3rd quarter Ebitda yoy rose by 43.3% to US$373m.

However, Las Vegas Sands Corp group performance improved by 45.5% yoy to USD12b in 3rd quarter. Profit rose by 31.7% to USD350m.

For Marina Bay Sands, we assess that this is the level it should be at, it is highly unlikely that Singapore’s gaming revenue and VIP Win % could raise any further.

Macau is totally in a different scenario. Sands China will continue to do very well going forward. Sky’s the limit. Sands China share price will likely to hit HK$65 to HK$70 by year-end.
China’s economic growth over the 3rd quarter has been strong. Such momentum will continue into 4th quarter. Year 2014 will be the consolidation of its renewed economic policies.

Genting Sentosa as we assess, there’s still no room for any significant improvement in its about to announce 3rd quarter results. There will be no surprise awaiting.

Afternote

Share price of Sands China shot up to HK $60+ after our assessment released.
Based on the current trend, China economic growth seems to pick up momentum too soon after last year’s clamped down and credit crunch. It is very unlikely that the new premier of China would try any policy to slow down the economy train, in the following 6 months. Too many domestic political and market issues need to be revamped going forward and therefore a stable economic growth rate remains key factor.
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Therefore, Macau has come to the new crossroad again, after mediocre growth the last two years. Sands China has mastered the act of generating good casino patrons since it’s inception in China’s SAR.
IT IS POSSIBLE that Sands China share target price may be adjusted even higher than HK $70 in the next two quarters.
WATCH IT!


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By:  Professional Ground panelists assessment

A State of Stagnation

For the past three years, only 7.7% of locals visited the IR casinos more than once.
Majority of the local population never visited any of the IR casino.

Frequency of casino visits has been dropping too, by local patrons from the height of 20,000 daily to only 17,000 as at end of 2012.

Casino entrance levy collection by the govt has dropped from s$216m in 2010 to s$174m in 2012.

Annual entrance fee for regular patrons dropped by 20% over the past three years.

Many genuine casino patrons (local) are blocked by stringent Exclusive Rule from visiting the IR casinos.

There’s no sign of loosening the casino junket control regulation which is one of the most stringent and restrictive rule of games for VIP business of casino. 

On hindsight,  Steve Wynn should be laughing away on his early withdrawal from the initial stage of casino license bidding for the most high costs Integrated Resorts …
He can now pay focus on Japan.

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Recommendation: 
Genting Singapore stock – SELL rating


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Assessment by:   Professional Ground casino experts panel

2 Sep 2013  Mon

Final word – As we had evaluated previously,  Sands China casino property in Macau would do well after the change over of Chinese leadership (the 18th CP Congress). We had also envisioned that by mid 2013 onwards Macau’s VIP gaming sector would revive considerably with increased volume of non-negotiable chip transactions. We hope some investors took our advice earlier and make some good gains on this counter.

It is highly probable that Sands China Ltd.  counter (HK 1928) may even rise above HK$54 level by mid  2014.
This year,  China’s GDP growth may still hit above 7% originally targeted for.
By 2015 China is poised again to go for 8.5% GDP growth.

Recommendation:   Strong Buy