See my comments on LVS Q/buybacks this morning, but I agree it will be great to hear from LVS... they will be out to stomp on naysayers, dip S media and weak sauce aalaysts' perspectives on the sky falling in on Macau.
Those who know Shel's story can also grin knowing they are coming a full week ahead of last year's June Q report date. We are expecting great news from them, likely to mash all of the bs noise into the pavement with thumping kicks in the head...
I can hardly wait to hear Shel and mike all but snort listening to Robin ask dumb S questions about the weak hold purportedly suffered by ALL operators in June... yeah right... for those who have taken an introductory statistics class, that is about as likely as ALL Chinese familes having precisely 1.1 children. LOL
great stuff grftt...
The fun for MPEL and LVS longs begins with LVS' reporting on Wednesday...
VIP is likely going to be flattish for the Q for them YOY in dollar terms (yet still a huge part of overall GR and profitability as you understand), but the power of mass/premium mass revenues ramping up hard as those sources have grown 35% overall and likely MORE THAN THAT for LVS and MPEL is going to be a punch in the face for the shorts and dippy analysts lowering ebitda and adj ebitda numbers.
During the March Q LVS bought in a bunch of stock above $80... they should be reporting the taking in of a tanker full below $75. LOL
You have made similar comments many times, but your comments "GGR for Macau gaming is nearly irrelevant," and "VIP has huge GGR and low margins, giving it a disproportionate and meaningless emphasis," "GGR of very minor importance in China gambling" and "A large drop in VIP/GGR has a very small effect on most Casino’s EBITDA and Profit" are wrong.
In 2013 2/3 of total revenues for Macau were from VIP. This year VIP GR are running roughly half (50%) of total GR in Macau revenue and will continue to figure prominently in overall gaming revenues for years to come in Asian venues.
Focusing on MPEL, last year VIP was roughly half of gaming rev; this year it is running at less than 25% of total revenues, but that is because MPEL is WAY ahead of the pack in converting VIP to direct credit -- so called "premium mass." Search grftt's and my posts on that term to learn more, but that is MPEL's business plan which is being "copied" by others and is a key aspect of understanding why VIP is diminishing in importance to those companies that succeed in following MPEL's lead/execution.
Your suggestion that "costs for mass are low" is also wrong. VIP margins are lower because VIP players are technically better (lower holds) and also require house payment of tour operator commissions and other concessions (comp rooms, F&B, tickets, entertainment, jet/helicopter transport, etc). Mass players are filling the rooms, shows, restaurants and clubs... all of that is more expensive than VIP per dollar of gaming revenue, but mass players are technically worse (i.e., lose significantly more to the house per dollar bet) and also drive the revenue series from the list at the top of this sentence.
Your comments on currency, "illegal card swipe and phony loan shop transaction" [sic] are being the reason for "VIP crackdown" are also wrong. THAT is what we were calling "noise" 2 months before Shuli Ren, IBD and some analysts figured it out. They should all should curtsy on your take.
We are completely unconcerned with outlier holds... anyone who is does not understand the business. That said, analysts who suggest that all companies had weak holds for June or the Q must not have taken even an introductory course in statistics.
Bain's slight clips to 2015 an2016 estimates are largely related to revised depreciation and amortization schedules in his modeling of future gaap basis expense levels; as you infer, those do not impact ebitda, adj ebitda or adj eps... so they frankly do not matter to anyone who understands the business.
As for GGR, I have discussed the conversion effects (VIP to premium mass/direct credit) several times over the last two years here. MPEL's business plan is to make that happen for themselves in Macau, initiatives LVS tried and did a miserable job with in Macau and Singapore two years ago (credit charge offs and alienation of VIP resulted) but is apparently now doing better with, and which Steve Wynn is now learning is the way of the future and tips his hat to Lawrence. That the media and other morons, sellsiders included, continue to talk about VIP and GGR as the thing Macau is in trouble on is a screaming indication they do not know S from F, about like idiotic Sybil holding conversations with herself on this board (an aside was that on yesterday's new aliases she talked about HK traders shorting or not there as if they matter when the ADS equiv trade was less than 10k shares LOL).
These dippy posters apparently continue to think they are influencing retail investors, but as I have said many times here, retail holders control only about 5% or so of the stock, so the tape is a study in pissant sleeve daytraders flip trading multiple times per day. It is a big yawn.
Ya the stock has been choppy, but remember what we said in early July 2013: at $21 the stock is stupid cheap and will be above $30 by EOY (it hit $40). This yr, caveat being out to Dec Q report, we think $50 is about the same feel from present levels.
Bain is a smart guy; Citi has been a key bear and is now twisting back to a bull longer run on 2014...
But as I have said many times here, we know a few of the other pm long these shares, and pretty much all of us ignore the sellside other than to know what they are talking about.
As for Bain's eps numbers, he is one of the few with connectivity to the MPEL C suite and has likely has dialed in a bunch on what mgmt wants him to know and publish, consistent with Ho's "beat and raise" idea of investor relations. We also have a known item that expenses are ramping up for Manila without any revenue in their models for the year (certainly not in 2Q) and most recently we know they have increased the budgets for manila (right when they signed up Hyatt after already raising the budget last october) and also for MSC initial phase.... right along with disclosing that they are now going on 8 cylinders planning the "expansion phase" for Studio City.
If not obvious,we don't really care what most analysts publish and hope they ensure MPEL beats. It is of minor relevance to MPEL what Macau VIP/GGR or even MPEL's GGR is for the near term; composition is what matters and VIP is close to meaningless for MPEL. EPS numbers don;t mean much either this year as long as they are not crushed out vs consensus... our focus remains ebitda and adj ebitda. MPEL ought to be able to hit the current consensus on eps even if VIP is down 25% YOY... mass + premium mass should be excellent this year-- even if not enough to drive last years 62% increase in adj ebitda yoy.
Again, MPEL will be close to doubling their adj ebitda run rate f18m... trading at less than 12x current ebitda is patently ridiculous unless the china economy is going to collapse... we'll focus on helping grind the wheat vs panicking that the sky is falling.
Talk about irony...
Barron's weak sauce blog writer on emerging markets, Shuli Ren, has spent much of her energy spinning even positive news on Macau gaming with a negative bias since March, with many articles discussing how awful things are and the gloom and doom of the how things are bound to worsen and beat up the stocks.
And yet in today's article she gives air to the swelling perspective of many sellside "analysts", the very same idiots that have been used by short selling pm as tools along with the media to disseminate all of the bs noise (UnionPay "clamp down", corrup[tion witch hunt, dimished china economic prospects and growth, loss of credit availability and pending collpase of shadow banking system, the doom of china's real estate market, VIP junket fraud, Visa restrictions coming (not), and all other manner of slung poo these dolts have fired up) that maybe the names have been unduly thrashed by the incessant parade of bs noise, and that, almost like Rasana Dana, it's about time to say, "ummnnn, Nevermind."
She is seemingly oblivious to the role she has personally played in all of this -- maybe she is simply so ignorant as to not understand she has been instrumental in sharing the spew she now calls "noise"? If it was not so ridiculous, it would be laughably funny.
Too bad her piece today is ignored as everything she writes should have been all along. so much for her mission of writing about "real time, market moving news"... That per se is ironic and funny.
Now everyone reading this will have some idea of:
1. What "premium mass" and direct credit and franchise development centered on "stay and play" for elite wealthy patrons and their entourages" means;
2. Why "premium mass" has such outstanding table yields -- including "best in group" from MPEL;
3. An inkling of how and why Steve Wynn acknowledges that some very enterprising and bright guys have better connectivity and dial into the elite wealthy of China and how he and the other U.S. based competitors are "a few years behind but working to catch up";
4. Why MPEL has built its franchise and new developments to cater to "premium mass" patrons including Alktria and especially COD on Macau -- and why the new Studio City (initial phase opening next year and expansion phase now in planning), as well as Tower 5 at COD (which will be solely about "premium mass" catering) and at least 300 deluxe suites (out of a total of 970 or so rooms) at COD manila will be for the elite players.
5. If they have not read anything else we've discussed here, this explains why VIP growth slowing doesn;t mean much to MPEL.
Still, ignoring all of that, if I could not do math and thought that with mass+ "premium mass" growing at 35% for the june Q and VIP flat or down slightly yoy meant MPEL's ebitda was going to be hurt because only 20% or so of MPEL's revenue is from VIP (funny, huh?), well... then i would be a certifiable idiot and think that shorting MPEL was a sound trading idea... yeah... and I might even use that enormous stupidity trying to figure out how to come up with 30 different sign in aliases and spend all day logging in and out to make comments back and forth to myself the way our latest drivel-meister does. LOL
Portugal's weak banks need capital, but the sky has not fallen on China yet... LOL
BEIJING—Chinese exports grew in June on the back of strengthening U.S. consumer demand, in a positive sign for China's factory sector and for the global economic outlook.
The pace of export growth disappointed some economists, though others blamed the lingering impact of distortions in last year's Chinese trade numbers used to make the comparison.
"The global demand recovery is still on track but the momentum is very modest," said Ma Xiaoping...
Chinese exports expanded by 7.2% year-over-year in June, compared with the 7% year-over-year increase in May, according to China's General Administration of Customs on Thursday. This was below the median forecast of 10% growth from a Wall Street Journal poll of 21 economists.
Some economists shrugged off the shortfall. "A number over 7% is quite decent, quite real," said Lu Ting, economist with Bank of America Merrill Lynch. "I think it's the right pace for China based on global demand. Forget about expectations"
Others cited strong import data, which suggested solid demand from Chinese consumers and a positive impact on China's efforts to speed up infrastructure spending and loosen credit—moves economists call a ministimulus.
"We saw imports go up quite a lot," said ANZ economist Li-Gang Liu. "And the strong trade surplus will vindicate the U.S. view that the Chinese are still accumulating a large trade surplus, suggesting that the renminbi might not have reached its fair value."
...export momentum does appear to be returning, analysts said. U.S. imports of goods from China increased in each of the past four months to reach $37.99 billion in May, according to Commerce Department data. Despite tepid global economic growth in recent years, China has continued to pick up market share. Nearly 20% of goods imported globally by the U.S. now come from China, up from 16% in 2008... [big share of pie on a much bigger base we'll add]
Re "Anything else?" We could use a Woody Allen horse manure sock factory for the media... add Zacks to the Barrons' and IBD "hall of stupidity" crowd.
doc, the conversion of the most desirable stay and play patrons from VIP tours to direct credit relationship "Premium Mass" players is poorly understood by call it almost everyone -- but certainly most analysts and sellsiders from a significance standpoint. Premium mass and VIP trendlines at MPEL are more than expressed by MPEL's results -- this conversion dynamic is the PLAN and why MPEL is mashing competitors on a pound for pound basis. It is also a serious piece of why MPEL remains in fabulous standing with the political leadership in Macau... catering to these highly valuable visitors is valuable to MPEL, but it is also that to Macau's politicians, shop owners, restauranteurs and other cultural development aspects for the island and surrounding buildouts.
We don't think credit availability is an issue for most quality tours or players, but losing the cream players to direct Premium Mass is not going to be good for tour operators dso/collection stats. LOL
"Our development pipeline continues to progress, with Studio City on-budget and on-track to open in mid-2015, while the timing of our Philippines Project remains unchanged and is expected to open around the middle of next year. Both of these exciting development opportunities are key components of our strategy to maximize return on invested capital and drive long term shareholder value."
Reread that last sentence for emphasis -- do you think they are going to Manila to dilute their ROIC? We sure do not as discussed at length here by us a few times since 2012.
"Macau continues to deliver robust growth across all gaming and non-gaming segments in 2013, highlighting its unique position to cater to the rapidly evolving Asian consumer and expanding middle class. Similarly, our Manila project is well positioned to address this segment in the Philippines and the broader region providing another destination to a wider array of consumers seeking a broader leisure and entertainment proposition. Both of these markets are expected to benefit meaningfully from wide-reaching development plans and significant infrastructure improvements, helping to improve access and enhance customer experience."
Here is more reference to doing more than just gaming in Macau and Manila -- and identifying and capitalizing on the emerging trends in mass and PREMIUM MASS that MPEL is leading the pack on. Ring any bells about what Pansy was calling her visionary thing in the article this week? LOL More like she is trying her level best to think of what brother Lawrence would say and ascribe that "vision thing" to herself whenever she finds herself standing next to an open microphone.
We look forweard to the june Q results and updated outlook from MPEL... we like Lawrence's upod framing of 15% GGR growth for Macau this year (said knowing VIP was being crossed into Premium Mass by MPEL) and can hardly wait to see more info on their "PHENOMENAL" Golden Week that began May.
"Adjusted EBITDA(1) was US$330.1 million for the second quarter of 2013, as compared to Adjusted EBITDA of US$203.8 million in the comparable period of 2012. The 62% year-over-year increase in Adjusted EBITDA was [primarily] attributable to strong growth in the mass market table games segment at City of Dreams..."
A ceo focused on quant and FCF generation?
"I am pleased to report another successive quarter of record earnings and EBITDA, building on the strong momentum in the first quarter of 2013.
"Highlighting the ideal strategic positioning of our flagship property, City of Dreams, this premium-mass focused property once again captured meaningful market share in the mass market table games segment which, in turn, has been the major driver of our impressive group-wide performance in the second quarter of 2013. City of Dreams' unique ability to cater towards these highly discerning, premium mass market-focused customers is highlighted by our market-leading mass table yields, which is increasingly important in a table supply constrained market."
"Premium mass focused property" is pointed here... as the most desirable players and MPEL have forged their very own direct stay and play relationships including credit arrangements settled up every 30 days, you need not wonder too much why VIP GGR growth has diminished in macau YOY, quite apart from all of the other headline bs and particularly as other venues try to follow MPEL's leadership on this dynamic.
Here's more from ho on that: "We continue to move forward with the fifth hotel tower at City of Dreams and anticipate to commence construction by the end of 2013. This iconic additional hotel tower represents another powerful addition to our wide array of amenities and attractions that City of Dreams already offers its premium-mass and high end customers, providing another tool to further extend our leading position in this key segment."
Tower 5 is rolling on schedule as poer subsequent updates.
This is fun stuff for longs... LOL
Start by reading my latest "Quant fun" post that Sybil, who is dumber than dirt from all visible references and can't do 3rd grade math as we've seen before, apparently doesn't like. (ROFL) Yeah, if mass is growing at 36% in macau and MPEL is leading the pack on that piece of the pie and now pushing 80% of revenue from that vs VIP, matrix got it right 80% up 36% is (net) gaming rev growth of around 28% [(0% x 20%) + (36% x 80%)] for MPEL this Q -- even if VIP is flat/zero % growth for them during the 2Q14.
Compare that framework to the range of brokerage estimates out there for the June Q. The consensus number gets to around 3.5% growth, while the highest number of $1.51B drives growth of 17% yoy for the June Q. There's some room for upside surprise here, huh?
Sounds too optimistic? Maybe so (wry smile). Everyone who has more than 10 shares long here ought to go back and study last year's June Q a bit. Lawrence Ho's quote in the PR were all about how ideally positioned MPEL's COD was for pursuing their premium mass and mass gaming growth with constrained table growth for everyone. Seems he understands the ebitda and margin numbers on all these little quant details...
Without footprint expansion, during the June Q13, net revs grew 37% YOY! Reflecting the operating leverage, adj ebitda grew 62% YOY fir the Q ended June 2013. 62%! One might study the terms if they are a mystery because that is driving what Ho called MPEL's key objectives of "maximizing ROIC" and further expanding their ideal position in Macau and coming with COD Manila and Macau Studio City on schedule. Sybil and unhedged shorts can pass -- they don't know how to do math. LOL
Here's some more from Ho with my color comments:
The idiots at Zacks obviously has no idea what an "Integrated Resort" is or what the difference is between flat VIP for the Macau IRs vs MPEL growing mass/premium mass AT LEAST as much as Macau's reported 35%+ for the 2Q14 overall.
Here's quant fun in the form of a 3rd grade math quiz one can use to help develop an understanding of the MPEL story. If 20% of their gaming revenue stream is growing at 0% for the quarter (i.e., VIP is flat yoy), and the mass gaming portion (some 80% of MPEL's revenue -- by far best in class) is growing at 35%+ for 2Q14 yoy with a margin of more than 3x the VIP business, then how much will MPEL have for increased gaming revenue expressed in percentage terms yoy?
b. Negative 3.7%
d. No one can tell so it is best to sell the stock, especially since a complete idiot posts dog S under 30 or so aliases here all day long.
Soon to come: a fifth grade math quiz on what operating leverage means to adj ebitda growth for MPEL.
If anyone had any doubt about how absolutely useless Zacks "Investment Research" is, their "analysis" of MPEL today should be reason you get a refund back on your subscription cost. I've never read anything from them worth acting on, but this takes the cake. What a POS -- good for nothing except maybe training a new puppy in the house.
The Sybil (aka poser Shirley Mason) multiple personality idiot talking to herself on 30 names here all day long must be the author for that nonsense. MSC a waste if no gaming license? Search on "table limit" on thios board for authoritative sources to think through that bs. LOL
great comments... the good news about Vegas VIP last month is that Steve and Shel must have done some "old school" charter flights bringing in the Asian players. That let Tam pound his head into the pile of bs he helped mound regarding UnionPay machines (that is all about nothing of meaning to the elite venues), Visa nonsense (5 vs 7 days), smoking "bans" (that will turn out to be a benefit to those who do not want to be in smoke-filled casinos and yet a convenient place to smoke for those who do want to breath tobacco air all night), "corruption" crackdowns (yawn, but good comedy from Tam), table limits (that really aren't remotely adhered to even as rough guidelines), and so on and on... and since then he's clarified that UnionPay restrictions are just bs and tried to make the soccer excuse for why things looked slow for VIP last month.
Buttboy Tam and all of the central planners over there likely have had a huddle or two about protecting the Golden Goose that is Macau gaming, visitation, tourism, travel, restaurants, credit fees, etc.... All good news for Macau's future GGR growth.
We were going to add more yet another good slug here today but the DAL opportunity was too compelling to do anything else with capital today. As for the multialias #$%$ still using 20 aliases here daily, way too funny. I wonder if he was able to shake out 200 shares from the 48 retail investors reading here daily. LOL
The pm coming up the learning curve on this story (and LVS for that matter) are buying all the putz brigade will gift down here. Just think: if VIP is flat for MPEL, then they will have GR growth of "only" about 28% this quarter. LOL
Hey grftt, do you have more info on whether this hurt the Philippines in any way? This report said it largely missed the Philippines... This storm is supposed to bring sustained winds of 150 mph and gust up to 200 mph and waves up to 45' high! to Okinowa Japan... they are calling it the strongest superstorm EVER. Hopefully people get their families away from coastal areas!
"The Philippines was spared from the ferocious winds of Neoguri, which blew closest to land late Monday when it roared about 480 kilometers (298 miles) east of the northernmost province of Batanes, government weather forecaster Gladys Saludes said.
While the typhoon did not make landfall, it intensified the southwest monsoon, dumping heavy rains to some western Philippine provinces, she said."
My fav part of the great news china is broadcasting:
“China’s economic performance in the second quarter has been improved from that in the first quarter. However, we cannot lower our guard against downward pressure,” Li said.
And the new board dufus keeping us busy stuffing the ignore bin (unreal that yahoo lets abusive dolts post with more than one alias per company) is talking about Macau stocks "tanking" after the latest analyst upgrade? LOL
Yeah, the HK shares were down 1% overnight -- on a "whopping" 17400 shares. Converting that to the U.S.-listed ADS share equivalent, that is a mouth-dropping 5800 shares worth of painting the tape. But it is funnier than that: the HK shares were up that amount last Friday while U.S. markets were closed. LOL Even funnier is that for more than the first half of the day and volume-weighted, the "whopping ADS 5800 shares traded at ~flat for Monday in HK... it weas the last copuple thousand shares of dippy painting that took them down.
Beyond the fundamental and quant reasons the stock remains undervalued, the chart is now VERY constructive for longs. Down days over the last few weeks have been few and light trade weighted volume, the stock is back above the 40w ema and the 50d ema is now turning up.
Those are ridiculously uninofrmed and errant perspectives. DAL is by far the superior mgmt, balance sheet, ebitda and capital distribution story now... American is better only as to relative earnings multiple against near term eps growth.
We own both and ALK too.
LOL at the morons suggesting this is a short. DEad dead dead... ZQK was a great short at $8... this is one of the key stocks to own 2H14.