2022 Asian Gaming Power 50: Number 10 – Chen Lip Keong

FOUNDER, CONTROLLING SHAREHOLDER AND CEO
NagaCorp

POWER SCORE: 997
POSITION LAST YEAR: 12

CLAIMS TO FAME

• Majority owner of Hong Kong listed NagaCorp
• Personally financing half of its US$3.5 billion Naga3 expansion

CHEN LIP KEONG’s NagaWorld empire lives a charmed life.

A property in a poor country like Cambodia with steady appeal to Chinese gamblers should be in dire straits, caught in a pincer between coronavirus transmission in a nation with limited medical resources and Beijing’s threats to Chinese gamblers and casinos that host them.

Yet in 2022, NagaWorld is recovering well after a few months of fallow operations, with third quarter volume for mass market, premium mass and VIP segments increasing 5%, 6% and 43% on the first half of the year, respectively.

EBITDA is back in black for the year to date, and GGR for the same period has almost tripled.

Yet storm clouds remain.

Pandemic-era prospects for Naga3, the latest and most ambitious expansion of NagaCorp’s Phnom Penh property, are not as grand as when plans were first released. Labor tensions from last year are continuing to test the company’s reputation, while questions linger over how the company will repay certain significant debts when they fall due in the coming years.

In a recent note, ratings agency Moody’s said that although NagaWorld should generate sufficient cash flow to cover all expenses over the next two years, there is reason for pause around a US$545 million bond maturity in mid-2024 on “limited sources of liquidity given its lack of bank facilities and divestible non-core assets.”

This, Moody’s added, is in part due to EBITDA recovering slower than might have been hoped –estimated at US$252 million in 2022 and US$352 million in 2023 versus US$672 million in 2019, prior to the COVID-19 pandemic.

And Chen, who holds more than 70% equity interest in NagaCorp, has signalled an era without him at the helm after elevating his children to top management positions. The April changes split responsibilities between his three sons, with father supervising.

Whether this augurs a corporation with three times the ambition and achievement, or a King Lear scenario that dilutes performance and political canniness with Hun Sen’s government, remains to be seen.

Perhaps the company’s long-term fate lays with Naga3, envisioned to comprise five towers with a gross floor area of 544,801 square meters and connected by an 11-storey podium incorporating the hotel lobby, gaming facilities, retail, restaurants, a theme park, spa and conference space. The additional gaming space is planned to house up to 800 more gaming tables and 2,500 EGMs.

As part of the US$3.5 billion expansion agreement, the Cambodian government has extended Naga’s monopoly within a 200km (124 mile) radius of Phnom Penh by 10 years to 2045. NagaCorp’s gaming license runs to 2065, suggesting many more prosperous years ahead assuming it can put short-term liquidity concerns behind it.

That’s a fair accomplishment for a company that started on a barge in a country still reeling from decades of war and a genocidal regime in 1995. Today, NagaWorld rates as Cambodia’s only true integrated resort.

For the full list of 2022 Asian Gaming Power 50 winners, click here.