Venetian Macau (one rumored to be delayed)
This should get us above $15 easily. The run is not over.
Back to $18+ in next 9 months.
At $1 per chip, they will need a lot of orders to get to $12mm rate to be profitable next quarter. This market is also a one time order market. It is not a razor blade business. These chips do not disappear. Their exclusive arrangement also runs out in a few years and this turns into a bid business. This is not a good long term play.
Yes this is a one time market order, but as GPIC management has said in the past most of the time the casinos are a repeat customer when the time comes to replace chips. So initial chip orders are very important to future orders from the same casino. Eventually chips wear out just like razor blades. Now for the rest of 2007 we have one more one time market order coming up (MGM Grand Macau) and one followup market order (Wynn Macau expansion). You starting to see how this works now, lol. You also see how these exclusive agreements work.
" Their exclusive arrangement also runs out in a few years and this turns into a bid business. "
That may be true, but so far GPIC has managed to grow the business YoY (both top and bottom line growth) and create a significant barrier to entry by new competitors.
The number of new casino customers also represent a growing market, both domestically and internationally, so all things considered, I STRONGLY DISAGREE with your statement, "This is not a good long term play."
doesn't look like an order for RFID oh well. Just doing some calculations 1.2 million chips divided by 1000 tables comes to about 1200 chips per table not counting extra inventory. If I had to quess I'd say they need more chips and/or plaques, but thats just a guess.
No wonder it took them a while to get this right!!??!? I would guess that embedding a see-through insert is no simple QA task....
"The Bourgogne et Grasset � brand chips will incorporate exclusive security features such as high security holograms, UV pigments, Laser Lock(TM) infrared pigments and see-through inserts...."
WOW! - in spite of the relationship of VNX with Melco (via Elixir), GPI runs all of the bases for the casinos in Macau ... (still have the Melco 'City of Dreams' and 'Mocha' casinos under construction)
"...GPI is currently supplying all the casino operators in Macau where it has a dominant market share in casino currency. The Company's position is strengthened by recent announcements that Macau casino operators are entrusting GPI with the supply of their inventory of gaming chips and plaques.
The B&G chips for Venetian Macau will rank among the highest security chips ever made by the GPI group. GPI has supplied chips to Sands Macau for the last three years, and the continued endorsement of one of the region's leading casino operators speaks to the sophistication, elegance and quality of B&G products"
-- UV Pigments
-- See-through Inserts / Holograms (I imagine these are similar to what is used in 'paper' currency in other countries such as Australia)
-- Laser Lock(TM) infrared pigments (Laser Lock Technologies, Inc.)
Laser Lock� is a patented additive to any ink used for printing on paper, metal, glass, leather, plastic or woven labels. Only a specially modified laser can detect this additive thus making products counterfeit proof.