Melco Rises in Hong Kong After Deutsche Bank Lifts Target Price
By Kelvin Wong
Oct. 16 (Bloomberg) -- Melco International Development Ltd., run by Macau gambling billionaire Stanley Ho's son Lawrence, rose in Hong Kong trading after Deutsche Bank raised its target price.
The shares jumped 4.3 percent to HK$15.96 at 3 p.m., bringing their gain in the past two days to 7.8 percent. Deutsche Bank Hong Kong-based analyst Karen Tang raised her target price on Melco by 20 percent to HK$18 in a report released yesterday.
Melco PBL Entertainment (Macau) Ltd., Melco's venture with James Packer's Publishing & Broadcasting Ltd., is building three casinos in the Chinese city over a five-year period, including the Crown Macau, which opened in May.
Crown Macau will benefit from ``the emergence of VIP junket'' operators, including AMA International Ltd., Tang wrote in yesterday's report. ``AMA believes it can channel most of its junkets' VIP business to one casino. We believe this is Crown.''
AMA, 80 percent-owned by Hong Kong-listed A-Max Holdings Ltd., controls 10 Macau gaming junket operators.
Junket operators bring gamblers to casinos and earn commissions based on the amount they gamble.
Gaming operators are expanding in Macau, the only Chinese city where casinos are legal. The city surpassed the Las Vegas Strip as the world's biggest casino center with $6.9 billion in gambling revenue last year.
Melco, owner of 41.4 percent of Nasdaq-listed Melco PBL, also invests in gaming technology and slot machines. Its stock has dropped 13 percent this year, compared with the 48 percent increase in the benchmark Hang Seng Index.
To contact the reporter for this story: Kelvin Wong in Hong Kong at firstname.lastname@example.org ;