股
票
Research 研
究 Equity Sector[Table_BasicInfo] Report: Gaming Sector Noah Hudson 行业报告： 博彩行业 (86755) 2397 6684 [email protected]
16 July 2019
[Table_MainInfo]
Expect GGR Growth to Improve In 2H19 行 我们预计澳门博彩毛收入增速将在 年下半年改善 业 2019
报 We forecast Macau gross gaming revenue ("GGR") growth of 3.8% for full year 2019. Year to date through June, Macau's cumulative GGR has Rating:[Table_InvestIn fo] Outperform Maintained 告 SectorReport decreased by 0.5%. However, we are more optimistic on GGR growth in
2H19 since 1) we think that VIP segment growth could bottom out some time 评级： 跑赢大市 (维持) in 2H19, 2) GGR growth has rebounded in the past two months, 3) casino smoking lounges are now in place, and 4) we expect continued organic 2
growth in the mass segment. Stock Performance 股价表现 We expect continued organic growth in the mass segment supported by a record number of visitors this year. Year to date through May, the total 10.0 % return number of visitors to Macau increased by 21.0% yoy to 17.2 mn, and it is 0.0 estimated that cumulative mass segment GGR increased by 17.4% yoy. (10.0)
Given the boost from the opening of the Hong Kong-Zhuhai-Macau Bridge on
24 Oct. 2018, Macau visitation in 2019 is on track to easily reach a record (20.0) 证 high. Moreover, after dipping in 3Q18 and 4Q18, the growth rate and (30.0) 告 券 proportion of air arrivals to Macau is now increasing again, which we take as (40.0)
研 报 an indication that higher quality visitors are coming back.
(50.0) Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 究 究 Maintain "Outperform" sector rating. Our sector top pick is MGM China
HSI SJM Hds. Galaxy Ent. Wynn Macau
ResearchReport (02282 HK), with "Buy" investment rating and a target price of
报 研 Melco Resorts MGM China
HK$16.00. We think that MGM China is in a favorable position as MGM Cotai 告 Source: Bloomberg.
券 continues to ramp up. In addition, we recommend to "Buy" Melco Resorts &
Equity Entertainment (MLCO US) with a target price of US$23.70.
证 Sector Valuation
我们预计 2019 全年澳门博彩毛收入将增长 3.8%。截至 2019 年 6 月 30 日，澳门博彩毛 行业估值 收入累计同比下降 0.5%。但我们对 2019 年下半年的增长更为乐观，主要由于：1）预期
EV to BEst EBITDA (Next 4 Quarters)
贵宾分部有望在 2019 年下半年见底回升，2）最近两个月澳门博彩毛收入增速反弹，3） Mean 20 +1 ST. DEV. 赌场吸烟室到位，以及 4）预期中场分部将持续内生增长。 -1 ST. DEV. [ 受到游客数量创新高的支持，我们预期今年中场分部能保持持续的内生增长。截至 2019 T 15 年 5 月底，访澳旅客同比增加了 21.0%至 1,720 万人次；并且预计中场业务毛收入累计同 a 比增加 17.4%。由于 2018 年 10 月 24 日港珠澳大桥通车，我们预计 2019 年访澳旅客将
b 很容易达到历史新高。另外，在 2018 年第 3、第 4 季度的空乘旅客率下降后，现在已开
10 始回升；我们视该数字的增加为高端旅客回访的信号。 博l 我们维持“跑赢大市”行业投资评级。我们的行业首选是美高梅中国（02282 HK），我 彩e 5 行 们给予“买入”投资评级和 16.00 港元的目标价。我们认为随着美狮美高梅业务的持续升 Jul/12 Jul/13 Jul/14 Jul/15 Jul/16 Jul/17 Jul/18 Jul/19 _ 温，美高梅中国相对处于有利位置。另外，我们也同时推荐新濠博亚娱乐（MLCO US）， 业 Source: Bloomberg BIGAMEAX INDEX. L 并给予“买入”投资评级和 23.70 美元的目标价。
Gaming Sector e f
Company[Table_CompanyFinance] Name Code Price Rating 19PER 20PER 21PER 19ROE 19P/B 19 Yield t 公司名称 编号 股价(HK$) 投资评级 市盈率(x) 市盈率(x) 市盈率(x) 净资产收益(%) 市净率(x) 股息率(%) M Galaxy Entertainment 00027 HK 55.700 Neutral 18.3 17.3 17.3 19.8 3.4 2.1 a Melco Resorts & Entertainment MLCO US US$23.750 Buy 23.5 19.7 19.7 17.8 4.7 2.9 MGM China 02282 HK 13.540 Buy 20.4 15.9 15.9 23.9 4.8 2.9 r
Sands China 01928 HK 40.450 Neutral 19.1 17.4 17.4 47.7 9.1 5.2 g Wynn Macau 01128 HK 18.720 Neutral 16.3 14.6 14.6 329.5 55.9 6.4 Weighted Average i 19.1 17.2 17.2 68.6 12.3 4.0 市值加权平均 n Source: the Companies, Guotai Junan International, Bloomberg. ] See the last page for disclaimer Page 1 of 8
far thatU.S. fromassured is that a liquidity, greater also but from only Reserve growth. economic cautious severe ofdecline 12.7% yoy in M seg mass latest (the May flat essentially W place,and now 4)are in we continued expect the massorganic growth segment. in lounges smoking casino 3) months, two past the in rebounded has growth GGR 2) 2H19, in time some out bottom could growth on optimistic more are However,we 0.5%. by decreased GGR cumulative 2019. year full for 3.8% of growth ("GGR") revenue gaming gross Macau forecast We organic growthcontinued the mass segment in a of start the is rebound growth yoy 2.4% months. two past the in rebounded growth GGR Macau Figure Figure Se S Junan Intern S e e ource: ource: MOP (Billion)
MOP 10 11 12 13 14 15 (400) (300) (200) (100) think th 100 200 300 400 VIP segment e - . - - las
3: 1: Bloomberg. Gaming Inspection and Coordination Bureau of Macao SAR. Guotai Guotai SAR. Macao of Bureau Coordination and Inspection Gaming I
(Billion) n the recent the n during the current environment of escalated U.S. escalated of environment current the during 18.5% (the "U.S. "U.S. (the , and February, given a boost from the Chinese New Year New Chinese the from boost a given February, and , t
ment GGR increased by 17.4% yoy 17.4% by increased GGR ment
that Macau Macau Macau pag 14 ational. - 2015A Total GGR (L) Total 34.3% 231 e
y VIP segment segment VIP fo s ear to date t date to ear
r egmental -
growth
VIP TotalGGR Amount& 17.5% disclaimer VIP GGR 13 W Fed 2016A - 3.3% se room see e
223 two GGR Amount& ") - 1.7%
will improve in the months. coming in However,will improve it conviction, with view since this very strong wehold don't
13 recovery trend recovery might lower interest rates sometime in 2H19. A larger money supply would stimulate VIP gaming VIP stimulate would supply money Alarger 2H19. in sometime rates interest lower might months of May and June, Macau GGR increased GGR Macau June, and May of months
data - 2017A hrough June, June, hrough 19.1%
Ch growth growth 266 - 20.2%
ina trade warina tensionwill improve; woulddownside risk the tensionworse be if available
11 ay. think theWe sharp in decline the VIP segment is largely result the VIP of players being more o Cias oeay oiy o ae n 2H19, in ease to policy monetary China's for Total GGR Total Growth (YoY)
n increase in confidence for macro for confidence in increase n 2018A 14.0% - could bottom out bottom could 303 23.1% Growth 11 Growth ), it is estimated that cumulative VIP GGR decreased by 15.2% yoy, while cumulative while yoy,15.2% by decreased GGR VIP cumulative that estimated is it ), that there is a s a is there YoY YoY (R) 2019F - 3.8% will continue in continue will 12.7% . 314 .
, 12 In the VIP segment, yoy GGR decreased by 23.1% in April, followed by a less a by followed April, in 23.1% by decreased GGR yoy segment, VIP the In Monthly , Annually , P
tark difference between between difference tark - - - 10% 20% 30% 0% - - 20% 40% 0% 30% 20% 10% 40% 20%
some time in 2H19. in time some -
China trade war tension and its potential to negatively impact China's China's negativelyimpact to itspotential and tension war trade China
During the During
to
2H19 S Source: Figure Figure ource: MOP (Billion) 18 20 22 24 26 28 MOP (Billion) 10 11 12 13 14 15 , supported by supported , peak season, was the only month with positive yoy GGR GGR yoy positive with month only the was season, peak
- Bloomberg. first four months of months four first SAR. Macao of Bureau Coordination and Inspection Gaming - - economic growth economic 2: 4: 14.7% - 5.0%
25
13 Macau Macau Macau Macau GGR growth in 2H19 since 1) we think VIP segment VIP think we 1) since 2H19 in growth GGR
yoy the
While
4.4% Total GGR (L) Total
n i as ses iey ht h U.S. the that likely seems also it and [Table_PageHeader] Mass Mass GGR 12.0% VIP and mass segments. mass and VIP by 1.8% and 5.9%, respectively 5.9%, and 1.8% by 25 12 TotalGGR Amount& Mass
broader coverage of smoking lounges and lounges smoking of coverage broader
Macau's - 12.2% 0.4%
. GGR Amount& 26 12
We think think We 2019, Year to date through June, Macau's June, through Year date to - cumulative cumulative 23.4% 8.3% 24 15 cumulative GGR decrease GGR cumulative
that 1.8% 28.0% 26 it is more likely than not than likely more is it 15 Growth Growth GGR YoY YoY (R) Year to date through Yeardate to yoy (R) yoy 5.9% ns 24 10.6% 13 yoy growth yoy .
Page Page . , , Monthly We think We Monthly aig Sector Gaming - - 10% 0% 5%
2 10% 5% 10% 20% 30% 0%
of of Federal 8
,
d
wa
the not
by s
] 2 n i g r a M _ e l b a T [ ] 1 n i g r a M _ e l b a T [ Sector Report Gaming Sector 博彩行业 16 July 2019
end since Nov growth visitor per GGR negative prop lower by marked May and the marking sector. the for positive net still is it think we overall tables,but gaming the at less spending are who visitors more now are there means visitors of number the in surge The takes just one hour by Kong vehicle get from theto Hong to theairport bridge Macau on away far year last set record Kong Hong the of opening by increased years ten in rate growth quarterly highest the yoy, 21.2% 2019. in high historical a reach to visitation Macau expect We Studio City. "Melco") US, (MLCO Entertainment 2H19. during continue mass cumulative that estimated is W comparedas with the end of April. May, the Macau Bureau of Health had approved a total of 556 smo the new smoking ban. However, the approved smoking lounge coverage will be much broader during 2H19. For example, as of 31 high standard smoking lounges. We think approved government new in only allowed smoking with rooms) VIP (including casinos inside areas all in banned was smoking C Macau's compelling thus visitors, many too are there that deem might to puttinglawmakers consider ca a government Macau the that is downside Possible there Figure Se ore Gmn Iseto ad oriain ueu aa SAR, Statisti Region Special Macao Administrative Bureau Coordination and Inspection Gaming Source: asino asino smoking lounges are e expect continued organic growth in the mass segment mass thein growthorganic continuedexpect e e 20 25 30 35 40 10 15
. th 0 5 (million)
Despite the lower GGR per visitor, we think the bridge is net positive for the gaming sector since with new Cotai casinos casinos Cotai new with since sector gaming the for positive net is bridge the think we visitor, per GGR lower the Despite e provide - las 5: . visitors visitors - t
ember 2.6% 30.7
This reflects that reflects This Macau TotalNumber Visitors Macau of&Growth pag Mass GGR record growth be bysupported willa also visitors numberbreaking year this of sharpest decline since 4Q15. since decline sharpest
21.0 enoug e fo
2018 r who are first flying first are who
% yoy to to yoy % Macau Macau Visitors disclaimer 0.8% 31.0 . h gaming capacity to absorb more visitors without crowding out the premium mass and VIPand visitors.the mass premium segment withoutout visitorsmore crowding absorbgaming capacitytoh In addition to visitors simply going to Macau by vehicle from Hong Kong, t Kong, Hong from vehicle by Macau to going simply visitors to addition In ortion of visitors arriving by air as well as lower proportion of overnight visitors. As such, we expect we such, As visitors. overnight of proportion lower as well as air by arriving visitors of ortion was the first month where the bridge was operating for the full month and the " W e think e -
Zhuhai 17.2 32.6 the 5.4% cs and Census Service. Census and cs now now
Hong Kong Hong mn. Macau saw a record ann record a saw Macau mn. that trend to continue through October this year, but to start to recovery in November or December,or November in recovery to start to year,but this October through continue to trend
- p on on ofp the mainlandnumber visitors allowed year. each seg Macau
in
in in place will be m be will 9.8% 35.8 new attractions at casino resorts will attract more gamers. For example, example, For gamers. more attract will resorts casino at attractions new to ment GGR increased by 17.4% yoy 17.4% by increased GGR ment
Hong Kong Hong that that
B In the two months since 1Q19 since months two the In - ridge on 24 Oct 24 on ridge Zhuhai .
21.0% GGR was n I aking property enhancements property aking 17.2 n n addition, Macau's new smoking ban went into effect on 1 January 2019, whereby yoy
P
- Macau airport (which has has (which airport
- 10% 15% 20% 25% 0% 5% Macao Macao 5%
During egatively egatively impacted during 1Q19 as many casinos were not yet ready for
ober . B Figure er o ae hog May through date to Year ridge is shuttling in a large number of number large a in shuttling is ridge ual high of 3 of high ual .
Census Service Census Source: Yearlatest May through(the date to
1 2018, Macau visitation in 2019 is is 2019 in visitation Macau 2018, MOP 6,000 6,500 7,000 7,500 8,000 8,500 9,000 Q1 king king lounges in a total of 31 casinos, 10 more smoking lounges - The number o number The 6: 9 ,
oenet f aa Seil diitaie Regio Administrative Special Macao of Government
Macau Quarterly Macau substantially GGR per visitor per GGR , GGR per visitor per GGR , . 15.8% 5.8
We expect the strong growth in visitation numbers to numbers visitation in growth strong the expect We .
and adding new attractions attractions new adding and
19.4% mn visitors du visitors mn GGR per GGR Visitor per [Table_PageHeader] f visitors to Macau during 1Q19 increased by increased 1Q19 during Macau to visitors f 10.3%
higher higher . , 11.0% decreased GGR Visitor per h ttl ubr f vi of number total the
decreased capacity ring 201 ring 9.0% he bridge bridge he on track to easily surpass easily to track on
by 17.9% yoy to MOP7,351, to yoy 17.9% by 1.3%
bridge effect than the Macau airport) as it as airport)Macau the than segmental
8
low
by .
Given the boost from the from boost the Given - 4.4% - also also 1 end at City of Dreams Dreams of City at
8.6 Amount& Growth - YoY
% 17.9% makes it easier for easier it makes orsst Macau, to tourists data Melco yoy in both April both in yoy " " will come to an ios o Macau to sitors Page Page Saitc and Statistics n
- - - - 10% 15% 20% 25% 0% 5% aig Sector Gaming available 20% 15% 10% 5% Resorts & Resorts 3 of of 8
and the the ), it),
] 2 n i g r a M _ e l b a T [ ] 1 n i g r a M _ e l b a T [ Sector Report Gaming Sector 博彩行业 16 July 2019
(64.6%) five (64.6%) rooms hotel of supply tight star of rate occupancy demand. growing reflecting climb, to continute rates occupancy Hotel Macau's visitors quality higher who Therefore, w a May, 9. to 13.3% visitors an as take we in dipping After online come hotel the of area construction construction under hotels of number same the is This Macaoof Bureau grow We expect Macau hotel occupancy rates to Figure Figure Se ir ir Source: Source: Service. Statistics Census Region and Special Macao Administrative Source: e 100% 80% 82% 84% 86% 88% 90% 92% 94% 96% travelers are higher quality visitors, stay longer and spend more in the casinos per visit compared with land and sea arrival sea and land with compared visit per casinos the in more spend and longer stay visitors, quality higher are travelers
20% 40% 60% 80% ('000) th 3 0% the number ofthe vi ing demand and a limited number of hotels under construction. under hotels of number limited a and demand ing % % all visitors, of e - - yoy las 9: 7: Macau Macau who 86.1% t
2Q17
Macau Macau Macau Macau Total pag growth in 4Q18 in growth - 17,211 11,414 e e t until until even2020 or later,keeping at supply tight least the near tofor term. medium star, (19.8%)7,500 four 2,090 arrived arrived Transportation Office Infrastructure e hink hink that fo ind 88.6% 3Q17 r ,
3Q18 and and 3Q18 Land Star RatedStar Hotels Occupancy Rates Number of disclaimer as of the first quarter of 2019, there2019,of quarter first the of as ication to sitors up from up 9.2% 91.8% 17,760 10,777 - 4Q17 2,413 rated hotels in Macau increased by 1.7 percentage points percentage 1.7 by increased Macau in hotels rated Macau by Macau increasing increasing 5 - star could .
that higher quality visitors are coming back. coming are visitors quality higher that in Macau in who D 4Q18, the growth rate and proportion of air arrivals to Macau is now increasing again, increasing now is Macau to arrivals air of proportion and rate growth the 4Q18, 90.7% 1Q18 uring the first five months five firstthe uring s Visitor
under construction under
arrived Sea support support continued 18,630 11,236 2,745
air air proportion of visitors arriving by air compared to land and sea indicates a 90.5%
2Q18 and 8.5% in and in 8.5%
- . As of April 30, 2019, there were 37,800 star 37,800 were there 2019, 30, April of As .
star, (13.2%)5,000 three Arrivals by Modality (airplane or helicopter) or (airplane 4
- to Macau by star star .
91.8% 3Q18 22,152 10,355 3,296 Air be be 93.4% 4Q18 1Q19 and 4Q1Q19 maintain P
GGR growth. was
air increased by 3 12,670 2,923 1,596 - 92.4% were star 1Q19
of 2019 of 413,628
s t h ed f 2018, of end the at as
ed
a totalof a
increased by increased above above 90% for the rest of yearthis and into 2020, su - 18, respectively 18, star and only 900 a total of totala
sq.m. Figure Source: Source: Region Source: Macao StatisticsSpecial Administrative and Service. Census - - - - 10 Figure
- 10% 20% 30% 40% 50% 60% 40% 30% 20% 10% 21.3 18 hotel projectshotel18 Growth Rates Growth 0 2 4 6 8 2 0% ppt , down 11.9%down , - 1.596 million 1.596 Macau Macau 2Q17 8: % yoy 4.8
-
1 According to the to According Total 10: Macau Visitor Macau 0.0% 1.7% During 14.5% 9.2 .
Trans During During
% yoy, %
Macau Macau 3Q17 and accounted for 9.5% of allvisitors. two n down and [Table_PageHeader] 1.1 - yoy rated hot rated 10.4% portation Infrastructure Office Infrastructure portation 20.4% 3.3% - the first five months of 2019 of months five first the
By By land star (2.4%) yoy
the most recent the month most visitors arrived to Macau by air,by Macau toarrived visitors equivalent with totalwith to 92.4%, reflecting 92.4%, to 4Q17 In up from 18.4% 18.4% from up Star RatedStar Hotels Occupancy Rates . 4.4
5
Moreover, many of these rooms won't rooms these of many Moreover, the first quarter of 2019, the 2019, of quarter first the 25.2% -
3.8% 8.9% star Arrivals by M el rooms in Macau, including 24,400 including Macau, in rooms el 9.9% 9.9% 1Q18 Land, Public Works and Transport and Works Public Land,
6.7
6,810 rooms constructi under 6,810 hotel roomhotel 11.4% 24.7% By By sea - oprd o 1Q to compared 2.4%
2Q18 4.4 4 yoy - 14.8% 18.4% - star star odality yoy odality 3.4% .
3Q18 s growing demand and demand growing growing growth in 3Q18 and 3Q18 in growth . 3.2
with By By air - 13.3% 38.6% 26.7% , the number of number the ,
4Q18 Page Page available data, 1.6 18
proportion of aig Sector Gaming pported by
. Growth 3 Generally,
4 - 1.7 - 19.2% 51.4% 35.1% T
1Q19 star of of average average e total he
which which 8
on
s . .
] 2 n i g r a M _ e l b a T [ ] 1 n i g r a M _ e l b a T [ Sector Report Gaming Sector 博彩行业 16 July 2019
through tablegame 6,624 of exceed not flexible of maximum a to increase can operation in be to allowed that they can have in operation Macau. in Macau Gaming Inspection and Coordination Bureau has set a government Macau The Section Figure 5.8 miles (9.3 miles kilometers) 5.8 long. the Cotaialong Strip. The Taipa section the of LRT will have 11 stations and is air Macau the and Peninsula Macau the Checkpoint, c it since casinos i make also will LTR The visitors. among concern it as infrastructure Macau's critical a is LRT The congestion. traffic local ease will greatly it as resorts casino Cotai to visitation facilitate and Macau within travel the to then connects and casinos Cotai the of all at stops has LRT the of Taipasection The ofthe LRTopening likely will more or month even or date openingofficialno that given projects,and infrastructure in delays with record track government's Macau the on based However, properties. resort casino the by open to sec scheduled is LRT the of section Taipa the that announced 2020. until open won't system We expect that the first section of Macau's new Light Rail Transit ("LRT") Se Source: Source: e
ond half of 2019, which would greatly facilitate v facilitate greatly would which 2019, of half ond th e - , las
12: Macau Macau maybe maybe more or less tables in one year compared to the next, so the end of 2023, t
pag s Macau's of Each
Macau Interc Macau 7,150 table gamestable7,150 Transportation Office Infrastructure e fo s r
ome disclaimer onnects s in Macau as of March 31, 2019 31,March of as Macau in s locals who locals
Taipa Maritime Terminal Taipa Maritime ure hs e be anucd w tik ht the that think we announced, been yet has quarter about562 ityTransit Rail Light
is
iios o h T the to visitors limit ix
, and il ae inter ease will
by
gaming
ing 2023 might might than notbe until delayed 2020. government Macau the January, early In
t more
any
ey ay o vstr t tae t Cot to travel to visitors for easy very the n the . - concession (or concession more tables must According to the to According . want to cap the number of mainland of number the cap to want
tables umber of new gaming tables to about 1 about to tables gaming new of umber ia aiie Terminal Maritime aipa - iy rfi cneto, a congestion, traffic city
S can be added ystem . P
The LRT will greatl will LRT The isitation to all of the Cotai the of all to isitation port. It also has stops all stops has also It port. , and 6,588 at the end of 2018 of end the at 6,588 and , , Taipa Taipa , sub
Mac 7, first - 150 table games table 150 concession) holders concession) development ao cap ,
be be approved
equ Gaming Inspection and Coordination Bureau, there Bureau, Coordination and Inspection Gaming
on on the total number of gaming tables Source: Source: ivalent to to additionalivalent 1 an Figure Peninsula Section Peninsula , y ease ease y
the the total tables in operation can increase up to but should Lotus
Macau Macau
key key for for - by the Macau government a 13:
i by
Transportation Office Infrastructure
Macau Intercity Macau Transit Rail Light 2023.
[Table_PageHeader] are allocated a certain number of table games table of number certain a allocated are Source: Figure . This implies that implies This . Transit System Transit 12
The Macau Macau
per year, on average. average. year, on per - 11: 12 number of tables added each year each added tables of number
Transportation Office Infrastructure
tables Macau Intercity Macau Rail Light
per year . from the beginning of 2019 of beginning the from
The allowed to be in operation .
total total number of tables on average Since 2012, the 2012, Since Page Page S aig Sector Gaming were yste 5 of of . .
m, m, 8 a totala
is
] 2 n i g r a M _ e l b a T [ ] 1 n i g r a M _ e l b a T [ Sector Report Gaming Sector 博彩行业 16 July 2019
Table tablesnew gaming will be allowed Palace, we Lisboa will bebut at expectit opening partial a with 2019 yearthis Resorts & Entertainment (MLCO US) opened its Morpheus Hotel at Studio City in June, Feb operation in allowed Feb supply healthy maintain in growth Limited
*The *The Macau Notes: Source: Table Table Se estima is the shown number the and announced not of tables has been be*The New Lisboa Palace yet Gaming to allowed at number Macau *The Macau *The 25 HK) new tablenew aggregate. the 25 new 1 and 2016, September operation on table for new2017 25 table on games January 1 operation games for 2018 for January 2020 Total Additions: Total 2020 2020 2020 1 Jan. 2020 1 Jan. 201 2019 Late 1 2019 1 Jan. Additions: Total 2018 Jun. Feb. 2018 13 2018 1 Jan. 2018 1 Jan. Opening Entertainment (00027HK), (01928 Macau(01128China SAR,Wynn Sands (02282.HK), BureauMacao HK),MGMChina and Coordination Inspection Source: Gaming TOTAL ( Holdings The 13 MGM HK) (02282 China Ent & Melco Resorts Macau (01128 HK) Wynn Galaxy HK) (00027 China HK) (01928 Sands S.J.M.(008 Operators Entertainment (00027 HK), Entertainment (00027HK), (01928 Macau(01128China SAR,Wynn Sands (02282.HK), BureauMacao HK),MGMChina and Coordination Inspection Source: Gaming yoy SlotMachines yoy GamingTables e new table games for operation on 1 January 2017 and 25 new table games for operation on 1 January 2018 for a total of 150 new 150 aof total 2018 for January 1 on operation for games tablenew 25 and 2017 January 1 on operation for games tablenew Jan ,
ruary ruary Melco Melco th 9
2018 g g
. Total Additions: Total e - - -
rowth rowth 2019 1: Guotai Junan Internationa Junan Guotai 3: 2: las
games for operation on 1 Jan on operation for games
. The next casinomajor resort to open will be SJM Holdings
Macau Macau Resorts & Resorts Macau Macau TotalNumber Macau t 2018 Gaming Inspection and Coordination Bureau Coordination and Inspection Gaming of Gaming Inspection a Inspection Gaming
Gaming Inspection and Coordination Bureau Bureau Coordination and Inspection Gaming pag
2018 80 HK) 80 e
,
Sands China ( China Sands HK) (00880 SJM Hds. HK) (02282 China MGM HK) (00880 SJM Hds. Melco HK) (02282 China MGM (MLCO US) Resorts Melco HK) (02282 China MGM HK) (1928 China Sands HK) Macau (01128 Wynn Developer fo and 25 new table games for operation on 1 Jan 1onoperation fortablenew games 25 and r TotalNumber
Planned CasinoPlannedDevelopment Entertainment ( Entertainment
Te aa Gmn Iseto ad oriain ueu "GC" rsrcs h nme f aig tables gaming of number the restricts ("MGICB") Bureau Coordination and Inspection Gaming Macau The . disclaimer
0
(00200 HK) (00200 0577
aa' ttl ubr f aig tables gaming of number total Macau's MGICB . The 13 The 13 ertainment
- nd Coordination Bureau Bureau Coordination nd HK
0
H
demand balance demand H l, 14,578 1928 HK)
2015 12.0% l l
without any VIP junkets until sometime later in 2020 in later sometime until junkets VIP any without d. (00577 HK) & Melco HK)&Melco d. (00577 d. (00577 HK) & Melco HK)&Melco d. (00577 5,957 Wynn Macau (01128 HK), MGM China (02282.HK), Sands China (01928 HK), SJM HK), (01928 China Sands (02282.HK), China MGM HK), (01128 Macau Wynn 4.3% )
MLCO
uhrzd 0 nw al gms o oeain t G Cti fetv we i o it when effective Cotai MGM at operation for games table new 100 authorized .
2019 for a total of 125 new table games in aggregate. in games table new 125 aof total for 2019 A of Casinos byCasinos of Compan
of Casinos byCasinos of Company,2013
(
MLCO US
US).
(conversion) Macao Londoner The (SJM) Palace Lisboa CotaiMGM Palace Lisboa Resort Melco Cotai MGM (Studio City) Hotel Morpheus Cotai MGM Macao The Parisian (Sands) Palace Wynn Name Project
) . authorized new 100 table authorized operation games at for Wynn effective when Palace on it opened 22 2016, August granted Resorts & Resorts &
13,826 2016 The last major casino resort to open in Maca in open to resort casino major last The - 6,287 uhrzd 0 nw al gms o oeain at operation for games table new 100 authorized 5.2% 5.5%
Timeline
P (SJM) A
100 new table games for operation at MGM CotaiMGM ateffectitable new100 gamesoperation for
Entertainment ( Entertainment Entertainment ( Entertainment
y,201
2015
20 37 A 5 4 0 1 4 1 7 Construction Under Additional Tables Additional Tables construction Under Tables Additional Tables Additional Operating Operating Tables Additional Tables Additional Status Current uary 15,622 MLCO U MLCO US 2017 -
- 13.0% 20 6,419 2019 2.1% (2.5 20 ’
2019 for a total of 125 new table games in aggregate. Melcoaggregate.gamestotal intable a 125 newforof 2019 A (00880 HK) Lisboa Palace, which is expected to open in late % F
F S
) )
, , n 1.5% and Guotai Junan International. Guotai Junan Guotai Junan International. Guotai Junan 2016
We estimate that it will that it We estimate
1
00 tables. 20 38
A
5 0 1 4 2 6
. The MGICB has not yet announced how ma how announced yet not has MGICB The . [Table_PageHeader] 16,059 2018 6,588 (US$ bn) (US$ n 201 in 2.8% 2.6% US$1.1 US$1.1 US$ US$3.9 US$ US$1.0 US$1.0 US$2.9 Capex
and was granted 40 new tables in Ja A the Parisian Macao effective when it opened on 13 13 on opened it when effective Macao Parisian the n.a. n.a. n.a. n.a. n.a. n.a. 5. 5.3
2017 3 9
be granted granted be u was MGM was u
22 40 n 20 and A 5 0 1 4 2 6 ve when it opened on 13 Feb 13 on it opened when ve (00880 HK), G HK), (00880
Gaming Tables New
100 1 100 1 100 20 17,059 another 25 tables on 1 Jan. 1 tableson 25 another 201 50 25 25 6 40 25 5 25 25 6,753 6.2% 2.5% 5 0 0 HK), SJM (00880 HK), Galaxy HK),Galaxy SJM(00880 HK), HK), SJM (00880 HK), Galaxy HK),Galaxy SJM(00880 HK), a total of 150 table new games in respectively ,
te te of Guotai Junan International. table games in the aggregate. the in games table 2018
9 Cotai, which opened in opened which Cotai, F alaxy Entertainment (00027 (00027 Entertainment alaxy
22 4 A 5 1,000 1,000 0 2 4 2 6 1 Slots New
n.a. 950 950 0 0 0 0 0 0 0 0
Page Page
ee o 13 on pened aig Sector Gaming . wl help will ) New Hotel New Hotel
2018 and 25 25 and 2018 6 201
17,724 Rooms of of 2020 6,853 3.9% 1.5% 2, 2,000 2, 1,390
8 2020. nuary nuary 200 170 645 645 780
9F 4 2 0 2 4 2 6 5 2 4 F
0 0 0 0 0 0
ny
] 2 n i g r a M _ e l b a T [ ] 1 n i g r a M _ e l b a T [ Sector Report Gaming Sector 博彩行业 16 July 2019
In addition, we addition, In rec and rating investment "Buy" with HK), (02282 China MGM is pick top sector our and rating sector "Outperform" our maintain We However,w industry shouldgaming reflect including risks, Sinomacro trading currently is sector The Table Se Forward Forward Figure Source: Source: Note International. Junan Guotai Source: Bloomberg, Weighted Average Simple Average Wynn Resorts Ltd Penn Natl Gaming Mgm Resorts Inte VegasLas Sands USA Operators Weighted Average Simple Average Wynn Macau Ltd HoldingsSjm Ltd Sands China Ltd Mgm China ResoMelco Galaxy Entertain Macau Operators Company e 20 10 15
5 th Jul/12 : Forward valuatio Forward : e - 4: - las 1 Bloomberg, Guotai Junan International Guotai Junan Bloomberg,
4 Gaming Sector Peers Comparison Sector Peers Gaming t EV/AdjustedEBITDA
-
: Adr pag a targeta price e expecte Jul/13 Macau Gaming PeersMacau Index,
e
fo r disclaimer ommend to ommend to Melco Resorts"Buy" Entertainment & (MLCO with target a US) ofprice US$23.7 Jul/14 ns are calculated based on next 12 months e months 12 next on based calculated are ns Mean 4 Quarters) (Next EV EBITDA to BEst - ST. +1 DEV. Macau's 2H19,wouldwhich GGR in improve growth to WYNN US 1 DEV. ST. MLCO MLCO US PENN PENN US MGM MGM US 1928 1928 HK 2282 HK 1128 HK LVS US 880 880 HK 27 27 HK Stock Code
Jul/15 of
HK$16.00. Crncy
USD USD USD USD HKD HKD HKD HKD USD HKD Jul/16 at at
1 . 3
. 2 We We Jul/17 133.890
18.290 29.020 63.230 18.720 40.450 13.540 23.750 55.700 forward adjusted EV/a adjusted forward 7 9 Price (mn) - .080 Year think
Jul/18
M P thatMGM isfavorable in a MGMpositionChina as Cotai conti (HK$) 122.0 382.6 327.1 241.3 112.9 -
16.8 97.3 51.4 51.5 86.8
Cap Bn arnings forecasts. arnings
Jul/19
Hist - Fwd 20.0 21.3 21.8 22.2 20.6 20.6 27.0 21.9 20.6 20.4 20.3 21.2 17.8 22.2 US tension andMacau's trade the weak performance of VIP business.
Source: Source: .
Fwd 19.2 19.2 20.3 16.1 19.7 19.1 20.4 24. 18.3 19.0 18.3 20.4 10.9 22.7
Bloomberg, Guotai Junan Internat Guotai Junan Bloomberg, 1 djusted EBITDA. djusted
PE
10 12 14 16 18 Current
18.9 19.1 20.2 16.3 19.7 19.1 20.4 23.5 18.3 20.7 20.3 21.9 12.5 27.8 6 8 1
Jul/14 8
F
Forward EV/AdjustedEBITDAForward Figure
be abe catalyst for prices. share
17.9 17.3 17.2 14.6 19.0 17.4 15.9 19.7 17.3 16.3 15.4 17.2 17.6 1 8.8 9 F - Jul/15
15 [Table_PageHeader] :
We believe that the current valuation of the of valuation current the that believe We Macau Gaming PeersMacau Index, Mean 4 Quarters) (Next EV EBITDA to BEst - ST. +1 DEV.
1 DEV. ST.
Hist Fwd 12.1 14.0 12.2 13.5 15.3 15.8 14.3 10.8 10.3 10.6 11.8 11.7 9.4 6.9
EV/ .
Jul/16
ional Adjusted
Fwd 13.2 14.1 14.4 10.7 13.8 10.1 10.5 11.4 11.8 11.5 11.3 9.9 9.5 4.8
.
Current
13.1 14.1 14.4 10.7 13.8 10.3 10.0 10.5 11.4 11.7 11.5 11.7 1 9.3 6.1 8 EBITDA
Jul/17
F
10.2 10.6 10.9 13.4 12.4 11.9 11.1 1
9.1 8.5 9.7 8.9 9.6 5.7 9.4 9 F
Jul/18 0 . nues up. ramp to
55.9 11.7 11.6 1
7.8 1.8 9.1 4.8 4.7 3.4 PB 5.2 4.7 7.2 1.6 2.2 8
Page Page F
5 aig Sector Gaming - Year Year 329.5
ROE 1 (%) 41.3 65.1 64.9 47.7 23.9 17.8 19.8 27.2 24.5 31.3 17.7 7 8 9.2 7.5 Jul/19
F of of
8
Yield 1 n.a. (%)
3.2 3.4 3.2 1.9 5.0 4.0 3.4 6.4 3.2 5.2 2.9 2.9 2.1
8 F
] 2 n i g r a M _ e l b a T [ ] 1 n i g r a M _ e l b a T [ Sector Report Gaming Sector 博彩行业 16 July 2019
Se Tel.:(852) 2509 27/F.,Low Block, Grand © Guotai Junanand its group companies any to registration orlicensing requirement within suchjurisdiction. contrary be would use or availabilitypublication, distribution, such where jurisdiction any or citizen a is whoentityor person anyby, use or todistribution for intended or directedat, not isResearch Report This wher and risks, related its andconsult their ownfinancial advisers prior anyobjectives to investmen investment the comprehend and understand should Investors contain. may uncertainty and forecasts derived from the assumptions of the future political and economic conditi guarantee the accuracy and completeness of the information and data herein. This Research Report may contain some forward efforthasbestThoughensurebeento accuracythe informationmade of theand data containedResearch this in R contraryto opinions orinvestment decisionsby made assetthe managementand investment banking groups of GuotaiJunan. rep this inexpressed opinions Any companies. of group Junan Guotai ofexecutives professional other and dealers persons, opinion Any services proprietarily). investment banking, investment including a Junan GuotaiJunan").("Guotai Limited Kong) ResearchReport d This DISCLAIMER (6) (5) (4) (3) (2) (1) DISCLOSURE OF INTERESTS Rating Horizon: Time to6 18 months TheBenchmark: [Table_SectorRatingDefinition]Sector Rating Horizon: Time to6 18 months TheBenchmark: Company [Table_CompanyRatingDefinition] [Table_SectorSubReport] [Table_disclosure] 2019 Reduce Neutral Accumulate Buy Underperform Neutral Outperform Sell e
th
e Report.officer There isnoofficer of the anissuer mentionedin thisResearch asReport associate serving individual an employed not have companies group its and Junan Guotai Guotai Junan and its group companies withinprecedingthe 12 months. Guotai Junan a of 1% the market capitalizationof theissuer mentionedin thisResearch Report. SHARE CORP. A HK),VALUE BANKING (02886 MINSHENG INVESTMENTHK),HAITIANTIAN (08227 HK),CHINA HK),CSOP MSCI HK),BINHAI (01788 (02139 I GANSU JUNAN OF HK),GUOTAIHK),BANK (01638 GROUP KAISA for Except The Analystsand their associates dohavenot any fina thisResearchin Report. Exceptfor SHENZHEN INTERNATIONAL (00152 HK), the Analysts andtheir associates do not serve an as officer of the issuer ment
Guotai las RatingDefinition
t
RatingDefinition s expressed in this report may differ or be contrary to opinions or investment strategies expressed orally or in written form written in or orally expressed strategiesinvestment or opinions to contrary be or differ may report this in expressed s pag
Junan Securities(Hong Kong) Limited. A e -
18 Fax:(852) 2509 9118 fo
HongKongHang Seng Index NASDAQ / Composite Index HongKongHang Seng Index NASDAQ / Composite Index r
跑输大市 中性 跑赢大市 卖出 减持 中性 收集 买入 disclaimer nd its group companies have not had investment banking relationships with the issuer(s) mentioned in this Research Report acquire,subscribepurchasenot to b securitiesofferorfor anconstituteinvitation or oes
Millennium
or RelativePerformance < or RelativePerformance or RelativePerformance >5% ort RelativePerformance < ort RelativePerformance ort RelativePerformance ort RelativePerformance ort RelativePerformance >15% Definition Definition
Plaza,181 Queens’ Road Central, Hong Kong.
the th t h he he he he he e e
fundamental fundamental fundamental fundamental fundamental fundamental fundamental fundamental
- 7793
are not making nd its group companies may do busi do may groupcompanies its nd .
- Website:www.gtja.com.hk R (CNY) (83149 HK),Guotai Junan and its group companies do not hold equal to or more than
outlook outlook outlook , outlook outlook outlook outlook outlook
t. fr xml, h paig gn, ed aae, pno, newie o invest or underwriter sponsor, manager, lead agent, placing the example, (for etc. llRights Reserved. is is is is P - -
t decision. t 5% 15% - - - 5% 5% 5% 5% ;
ofthe sector ofthe sector ofthe sector ofthe companyor sector ofthe companyor sector ofthe co ofthe companyor sector ofthe companyor sector
a market in the securities in respect of the issu ; ncialinterests relationin to the issuer mentionedin thisResearch Report. ;
to
; to to to
15% 5% - 5 15% %
; ; ;
mpany ormpany sector
;
is is is favorable
un neutral.
favorable
ness that relates to companies covered in researchreports, in coveredcompanies to relates thatness .
ons with inherently unpredictable and mutable situation, so is is is is favorable. is favorable
.
un un neutral
to applicable law or regulation or which would subject would which or regulation or law applicable to favorable. favorable. d withd Guotai Junanand its group companies. [Table_PageHeader] .
.
005 K,A SSALA (03157 SCSMALLCAP HK),CAM (03095 of the issuer mentioned in this Research this in mentioned issuer the of
er mentioned in this Research Report. y GuotaiSecurities(HongyJunan
eport,GuotaiJunan doesnot resident of or located inlocated or resident of -
SAE (01988 SHARES H ort may differ or be or differ may ort -
looking estimates aig Sector Gaming e necessary e
Page Page by sales by
ioned 8 of of
8
] 2 n i g r a M _ e l b a T [ ] 1 n i g r a M _ e l b a T [ Sector Report Gaming Sector 博彩行业 16 July 2019