Macau Gaming:Your handy guide to 3Q17results

ca88手机版登录,Macau Gaming:Your handy guide to 3Q17results。VIP segment continues to lead growth: Macau 3Q17top-line gaming
revenuegrew 7% q-o-q and 22% y-o-y. Based on our estimates, VIP revenue
outpaced mass,recording 10% q-o-q and 36% y-o-y upticks vs mass that
grew at 5% q-o-q and 10%y-o-y. Given shift in the gaming mix, we expect
industry EBITDA to lag revenuegrowth at 6% q-o-q and 16% y-o-y. The
spillover effect from strong VIP growth intomass seemed to be less
pronounced vs our observation historically. This may beattributed to the
fact that the junket business is seeing a higher percentage of cashplay,
in our view.。

    Wynn to lead in y-o-y EBITDA growth, Galaxy and Melco Resorts in
q-o-q: WynnPalace opened in August 2016. Given the base effect, we
expect to see y-o-y growthstay strong and hit 76%, or USD310m in
property EBITDA, as it continues to grow itsVIP and mass segments.
Sequential growth is less strong at 4% q-o-q as thePeninsula business
could see some impact from the typhoon aftermath andnormalization of VIP
win rate. We think Galaxy and Melco Resorts will both see astrong 3Q17.
Outperformance in VIP and mass growth collectively drove 9% q-o-qand 33%
y-o-y EBITDA growth for Galaxy which translates into HKD3.57b in
groupEBITDA. Melco Resorts should benefit from 1) favourable hold in the
VIP business;

    2) recovery in mass market share at City of Dreams; and 3) continual
ramp-up ofStudio City, in particular its VIP business. In the
Philippines, we expect win rate tonormalize after a few consecutive
quarters of playing lucky. Overall, we estimateMelco property EBITDA to
come in at USD355m, +8% q-o-q and +23% y-o-y.。

    Continue to prefer Galaxy and Melco Resorts: Our valuations and
forecasts areunchanged in this note. Our FY17/18EBITDA estimates are on
average 1% ahead ofthe Street. While we expect to see good 3Q17results,
we think the market is lesslikely to respond positively given
slower-than-expected Golden Week growth,especially in mass. Trading at
14x FY18EV/EBITDA, we see limited re-ratingopportunities in the near
term. We recommend investors to stay selective andcontinue to favour
Galaxy (27HK, CMP HKD54.1, TP HKD59.1) and Melco Resorts(MLCO US, CMP
USD23.9, TP USD30.5), both rated Buy, for their undemandingvaluations,
strong operating records and good supply pipelines.。


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