Dow Jones Newswires
MARKET TALK: Wynn Macau 2Q Result Tipped To Beat Consensus -Nomura
0828 GMT [Dow Jones] Wynn Macau (1128.HK), whose parent Wynn Resorts (WYNN) will report 2Q results overnight, is likely to post 13% on-quarter property EBITDA growth to $308 million, which could come in slightly ahead of consensus estimates, writes Nomura analyst Charlene Liu in a report. Defensive VIP volume and a more normalized win rate (2.86% in 2Q11 vs 2.69% in 1Q11) will likely help lift the casino’s margin versus 1Q11, she adds. Liu advises investors to focus on any updates on a government approval of Wynn Macau’s Cotai project and any commentary on any impact on VIP business from credit-tightening in China. Nomura keeps a Neutral rating with a HK$23.50 target. Wynn Macau shares end 1.0% higher at HK$26.45 vs the HSI’s 0.3% fall. (kathryn.okeeffe@dowjones.com)
MARKET TALK: Wynn Macau To Impress Despite Capacity Issues -M
0814 GMT [Dow Jones] STOCK CALL: Wynn Macau (1128.HK) is trading at a multiple close to its peak and will have no capacity growth in the next few years, writes Morgan Stanley analyst Praveen Choudhary in a report ahead of the casino operator’s 2Q results scheduled to be released overnight. He adds there’s been uncertainty around the government approval of Wynn Macau’s Cotai casino project as well. However, he still tips strong VIP rolling chip volume in 2Q11 (likely up 53% on-year) and potential earnings revision by consensus. “Despite limited capacity expansion, the company is showing growth, which is quite impressive,” he adds, forecasting a property EBITDA of $316 million or 46% higher on-year and net revenue of $980 million, or up 37% on-year. MS keeps an Equalweight rating with a HK$25.00 target. The shares end 1.0% higher at HK$26.45 vs the HSI’s 0.3% fall. (kathryn.okeeffe@dowjones.com)
MARKET TALK: Macau Plays Up; Positioning Before 2Q Results
0333 GMT [Dow Jones] Macau plays are outperforming with SJM (0880.HK), Melco (0200.HK) and MGM China (2282.HK) each rising more than 2% vs the HSI’s 0.4% gain, perhaps as some early birds are positioning themselves for the results season, as Macau casino operators, or their U.S.-listed parents, begin reporting 2Q11 results between July 18 and late August. Among the six casino operators, Credit Suisse forecasts MPEL to show the strongest on-quarter EBITDA growth of 53% to US$185 million, followed by MGM China (+41% on-quarter to US$174 million) and Galaxy (0027.HK) (+31% to US$120 million). “In our view, the single most powerful driver of the Macau gaming market is the liquidity outflow from China, on the back of the increasingly negative real interest rate,” the house says; its pecking order, from most to the least favored are: MPEL, SJM, Sands China (1928.HK), MGM China, Wynn Macau (1128.HK) and Galaxy. (robert.li@dowjones.com)
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