just for matrix_trade... him and his Asian trading club multialias dufus pal mytek/idiotpumper/tahoejak/blacknite/etc.
Read that MS recap and optimism on VIP from late July 2014 (stock was at $33 then and he still had a BUY rating and $50 PT. F hilarious, huh?
Morgan Stanley being so "right" on this stock and was able to push it down starting when, at $46 you said last night? LOLOL almost as funny as your PT of $75 for MPEL this year while you sit and try to dis me? Too funny.
The reality, vs your imagination, is that MS actually got around to being really negative and slashing PT and EPS estimates (most don;t do legit ebitda work),with most of the pack, right after Ho reset expectations on MPEL's August CC.
What, VIP may be coming back someday? You mean Henny Penny might be wrong about the Sky Falling?... Shel Adelson and Steve Wynn are also making reference to that? And Shel thinks VIP will recover in December? Besides the advance bookings for then, how does he know? LOL
We'll let those Nov puts we wrote last week stay out there and hope someone enjoys having them... pass on paying anything for something headed to $0 at expiry...
less funny, but equally stupifying, MS took no rating action on MGM or LVS, both of which (unlike MPEL and WYNN) have construction/permit stall issues with the Macau govt, labor protest issues and significantly worse adj ebitda relative to footprint in Macau .
All of the firms except for Sterne Agee should use this washed out valuation period to find themselves some real research directors and, especially, some new analyst teams to follow the group... quality and credibility matter, and the "look back" moment, as it was in Fall 2012, is now upon the group... kinda like the airline group today (seems some pm are figuring out now that ebola is not transferred in the air as bird flu can be)... wait, you mean air traffic won't fall off 35% like it did two years ago, and that the stocks are #$%$ oversold? That turnaround reminds us of what happened in mid June of this year when MPEL ripped from $31 to $37 in less than 10 days... you know, back when everyone thought the World Cup discount and bs Visa and UnionPay swipe machine noise would be over soon... and no arrests or 30+ suicides had happened yet on the then stealth "corruption crackdown"... no, not the office manners initiatives, the one involving politicians and industrialists abusing "the people" of sovereign wealth...
Sep is typically seasonally weak, particularly the week prior to Golden Week. Last week, despite the all of the adverse press and impact on travel around HK caused by the pizza and pepsi riot led by a 17 year old as well as the ongoing "Sky is Falling" commentary by dippy "analysts" Karen Tang (Doosh Bagk), Mcknight (WFC), and the Somting Wong/Fong comedy team from Credit daSwiss and , and the OMG FUD of the draconian (LOL) "smoking ban", Macau's finance minister, Tam, suggested he thought GGR would drop by far less than the "analyst" consensus of high teens YOY for the month. His "guess" was for a 12% drop.
Given MPEL's business plan and niche is about the premium end of mass play and the downward force on overall GGR is about the falloff in VIP GR while the corruption witch hunt winds its way through the bad guys, terrific to see Tam had it nailed as GGR was down 11....7% for the month. Hopefully Tam is also convincing Xi to come for that contemplated visit to macau before too many more weeks pass... that endorsement that Beijing is not out to ruin Macau's/China's economic development/employment/infrastructure and stimulus plan... after last week in HK, both Macau and HK can also use all the help such a reboot would provide for the area.
We saw a 30% jump in MPEL during the last 6 weeks of 2013 as pm pulled hedges while the momo dips chased MPEL, and a 23% jump in this stock over the last three weeks June this year... given the incredibly stupid cheap valuation of this story right now, just maybe we'll see a few "unexpected" and large jumps higher before year end on catalyst news such as VIP turning up (Shel Adelson thinks so by December LOL), Xi visiting Macau with happy talk, COD Manila's opening kicking butt, formalization of IR Studio City getting what Ho called its "fair share" of tables and what else???
Tam's number is more optimistic than any analyst, even dippy Fong, Wong and Tang, and his comments were with the pizza and pepsi with 15-18 year old students packing their trash out in plastic bags "riot" going on. LOL Clearly the local and Beijing politicians appear to be coming to the realization that bs corruption witch hunts are unnecessarily impairing high roller play in Macau... yes, VIP may not get much past $20B in macau this year unless Shel is right about the imminent comeback.
Glad MPEL's focus on the premium end of mass and manila coming on line momentarily in the scheme of things has the company better situated than any other company for the current environment, regardless of whether "analysts" from Moron Stankey, Tang, or Fong and Someting Wong or others paid to write about their "research" and general cluelessness understand it or not.
These "analysts", who along with every ceo with operations in Macau, missed the severity of the corruption crackdown and impact it played out on VIP GR, are now almost uniformly negative (except for Bain that is).
Just as they missed the last two big run ups for the group, with all of them going to weak hold/sell ratings precisely at the bottom in 2012, after Ho's wake up call in august of this year virtually everyone of them lowered their price targets at least once since. That has taken the street consensus from $57 in August back to now $41 -- above ours at $40. Fun to recall the consensus was above our PT of $50 when the consensus went to $57 after the double top at $45.60 earlier this year (you know, right when we explained why we thought $43 was a great place to exit the trading sleeve and hedge out half the core long -- basis $17) back to the 50d ema.
In the end, this weak sellside analyst group doesn't matter to the stocks... only the buyside does.
Hard to imagine the occupy mess in HK ends quietly tonight, but for the safety of all concerned we hope that is what happens... reports are sketchy, but seems we can also expect that GW results will come in muted as a result of the "protest." Hopefully Shel's view of VIP returning to better than 80% of last year plays out over the next couple of months as he forecasted last week. Xi's rumored trip to Macau -- and maybe HK while he is down that way? -- might be helpful on many fronts as well. Tam's comments on Sep GGR being down 12-13% for Sep sounds rough, but that would be significantly better than even Bain has suggested. Tam's comments on this topic represent a call for the artificial suppression of gaming to come to the logical end before Macau's tax revenue is further impaired causing otherwise unnecessary political and economic disruption, say nothing of more seriously hampering future economic development there.
Merrill has never been the same since the sale to BAC... but the entire "analyst" group following this sector is essentially worthless and ignored as useless by the buyside teams.
Re my comments:
1. "Then they suggest competition, govt oversight, labor pressures and mgmt of openings (??) may trouble the shares."
Those pressures apply to ALL of the Macau companies. One doesn't need to have spent too much time on studying this group to know that MPEL's strategic positioning/niche puts them in the BEST tactical position of ALL of those companies on the issues listed, including Ho's legacy and govt connectivity. How in the hell does even the dumbest of analysts following this sector conclude these elements are challenges for MPEL creating the rating change they just issued, when those items are not listed against the improved rating on WYNN and it is MORE impacted than MPEL on EVERY ITEM NOTED? Again, this "analyst" team and their research director should be fired for this ridiculous incompetence.
2. "What about catalyst upsides those with a brain might ask these idiots? New properties opening (no real details there, but, MPEL has Manila, SC, phase 2 of SC and manila, and Tower 5). They added VIP might comeback and overall market GR growth might matter someday. LOL Seriously now, what a F POS report..."
Given the poor quality of MS' research on the group historically, and as noted in my comments, these guys have no clue about the power of what MPEL strategy, execution prowess, and footprint expansion coming will mean to operating leverage and adj ebitda over the f30m from here... Over that time period, MPEL's expansion will outpace all other companies in the group on a relative footprint basis, and the "expansion phases" for both Studio City and Manila that have only recently been introduced as future plans by MPEL in its filings foretell that more is coming... and all of that prior to Japan, where MPEL should fare well if legis is passed.
funnier still is that while WFC lowered numbers and rating on WYNN, these MS idiots raised WYNN on the Boston maybe and paradise coming next year.
sounds like their important clients/pricipals hedge funds are long WYNN paired with a short on MPEL (to let's say some who have been around the street awhile). LOL
Seriously now, with WYNN trying their best to replicate executing penetration on Macau in the mold created by MPEL, and their new Paradise Resort still 18 months away (8-9 months or so after MPEL's Studio City opens) and WYNN just about double MPEL's dependence on VIP play, just how do they come to the conclusion that MPEL should be reduced from market perform and has "peaked" (LOL) while taking WYNN from market perform to BUY? You sure as hell can not get there from what they published this morning. Stupifying...
MS' first call "research" comments this morning are really awesome (not). They must have important hedge fund clients short in a BIG BIG way to slam their own privates in the door like this... LOL
They suggest the stock has "peaked" [at what $45.60 or $24? LOL] and now reduce their price target to $28 from $36, saying the upside is $38 and the downside "bear case" is for the stock to go back to $15.70. This reminds us of the "genius" of this laughable analyst group (Bain excused) back in 2012 when they all said "hold" or "sell" with MPEL at $13 and LVS at $38... right when we came back onto MPEL and when we shared with the old LVS crowd on yhoo that we were pulling the box short (hedge) on the LVS position and adding a big trading sleeve. Then, longtimers here and from the old LVS board know, the dippy analysts were all far too conservative as the ebitda and multiples raged to the upside for the next 15 months.
Incredibly, they suggest that MPEL's "poor openings" in the past (confused with LVS' and MGM's history on Macau?) and recent renovations (he must mean the new machines on the mass floor or maybe the second floor Soho that just opened at Crown on COD? or maybe he means the repositioning/modifications MPEL is making for large VIP) clients at Altira? But they likely don;t have any knowledge of most of that... LOL) Then they suggest competition, govt oversight, labor pressures and mgmt of openings (??) may trouble the shares.
What about catalyst upsides those with a brain might ask these idiots? New properties opening (no real details there, but, MPEL has Manila, SC, phase 2 of SC and manila, and Tower 5). They added VIP might comeback and overall market GR growth might matter someday. LOL Seriously now, what a F POS report and great to see the marklet see through the bs.
We made fun of the analysts being a great contrarian call back in the Fall (and fall) of 2012... we think they represent the same "utility" right now. Too funny...
They still have a big #$%$ of the initial $500m authorization left to grab for as long as Henny Penny thinks the Sky is Falling on China's economy and macau gaming. GDP has cascaded all the way down to 7% you know! (LOL)
Tam's comments on sep results make it clear the local and Beijing govt officials are dialing into what their policies are doing to discourage VIP tours from playing in macau, thus hampering GGR and tax revenue generation they need to complete the grand plan/infrastructure for macau and surrounds.
Time (already?) for Xi's telegraphed visit to Macau to sound the all clear siren for VIP operators and players before they make Manila and lesser venues the places of preference for longer than this temporary blip.
See the article under this title there, but the article makes Murren sound like a novice even though he used to be an anlyst and is a smart guy whenever we have been around him.
But suddenly they think moving VIP tables to mass is a good idea? And some time in the not too distant future they think VIP will recover? And high level mass has better margins than does VIP? and he doesn't know (70 or 80% or some other number) percent of the Sep Q ebitda was from mass?
"He added: “I think with the VIP business people are getting a little bit worked up about it. But I think it’s very short term this turbulence, and I think some time next year we’ll see that [VIP] perk up." Gosh, Jimmy, we know lots of folks "worked up" about GGR growth going from 20%+/yr to negative...
“We’ve been able to diversify our offer probably than most. In most months we are number one or number two in slots in the market for example. And in the mass we’ve been able to segment our business in a fairly granular way, which has really been verified.”
Notwithstanding Mr Murren’s comments on diversification, public data analysed by GGRAsia indicate that in the first half of 2014, MGM China’s non-gaming revenue as a proportion of all revenue, was only 1.1 percent. That was a 2.5 percent fall judged year-on-year.
Only SJM Holdings Ltd, the local incumbent founded by Stanley Ho Hung Sun, had a lower percentage of non-gaming set against total revenues.
The other one-property operator in Macau – Wynn Macau Ltd – had 5.4 percent of all revenues from non-gaming."
And then his comments on Vegas GGR doing well because of Chinese players would have been great if he was talking about May/June only, and knew he could keep them coming to Vegas... alas, for him and MGM shareholders, the chinese whales stopped coming in July and didn't come at all in August -- all just about on script for those reading along here with us -- and that is his vaccuous premise for being pumped up about japan?
Belated echo of Ho's "GGR/VIP expectation reset" on MPEL's August CC... here it sounds as if some of the big VIP tours are booking December and forward. In context, he must mean "recovery" back to annualized growth, because unlike Vegas VIP play falling back to off the cliff, Macau will still put up ~$20B of VIP this year. Glad VIP represents less of MPEL's GGR than WYNN and MGM, both of which are likely going to have softer Qs than MPEL again this Q -- assuming normalized holds for all companies vs the fat holds seen for all but MPEL last Q.
From the article:
"The VIP gambling business in Macau could see a recovery in two months, after a Chinese government crackdown on corruption sapped demand, LVS Chairman and Chief Executive Officer Sheldon Adelson said.
Chinese players have been “staying below the radar” by refraining from going to Macau and spending money in ostentatious ways, Adelson said yesterday at the Global Gaming Expo, the industry’s annual trade show in Las Vegas. “They don’t want to send the message they may be corrupt.”
Sands and some of its biggest U.S.-based competitors have relied on Asia for growth as U.S. casino hubs, including Las Vegas, slumped in the aftermath of the 2008 credit crisis. Macau, the world’s largest gambling market, has shown rapid growth that stalled in recent months. Shares of the Sands China Ltd. (1928) unit, which operates properties in Macau, have dropped by about one-third since early July.
“Everything is cyclical,” said Adelson, 81. “It’s like gambling. Sometimes you’re up, sometimes you’re down.”
China’s campaign against lavish spending by party officials has reached its goals, the government-run Xinhua news agency reported Sept. 30, citing a statement after a meeting of the Political Bureau of the Communist Party of China Central Committee. The push against misbehavior may be ending..."
See full piece on Blommberg
yoonder, if you do not know, together with their development companies,Packer and Ho, two of the richest men alive, own some 67% of MPEL, a percentage that will soon be closer to 69% as they close out the initial $500m slug of the share repurchase plan they have been using lately.
Loved this part:
“It is my honor to collaborate with City of Dreams Macau, the leading integrated entertainment resort in Asia, and to inaugurate ‘The Space Legend’ in Asia"
as high as 103 kilometers above sea level in XCOR Lynx Mark II.
“The journey begins at City of Dreams Macau, followed by a night’s accommodation at The Peninsula Hotel Hong Kong. A luxurious ride in a Rolls Royce to the Hong Kong International Airport will transfer guests to board a private jet, taking them to Curacao, an island in the southern Caribbean Sea that forms part of the Dutch Caribbean for a five-day astronaut training and space expedition,” according to the release.
“The Space Legend” campaign will be launched by City of Dreams Macau starting in November this year. Guests who spend MOP1,000 or more at City of Dreams’ retail outlet, at the restaurant bar, or on tickets to Dragon’s Treasure, “The House of Dancing Water” or “TABOO,” and members of Signature Club will be eligible to take part in the lucky draw.
Newest COD promo...
WEDNESDAY, OCTOBER 1, 2014
Alex Tang (Left) and Steve Webster
The local resort City of Dreams has revealed its newest project, which seeks to enhance the experience of its guests by providing them with an adventure to outer space.
In an unveiling ceremony yesterday, City of Dreams and its partner, XCOR Space Expeditions Asia Limited, jointly presented “The Space Legend,” which allows guests to venture into outer space “for the very first time in the history of the Asian entertainment and leisure industry.”
During the ceremony, Steve Webster, senior vice president of marketing at Melco Crown Entertainment Limited, said that this unique project is “creating a legend.” “We are the first and only premium integrated resort in Asia offering such a one-of-a-kind journey to its guests,” he said.
“This is the first commercial space travel ever provided by any resort operator in Asia. A total of three packages will be given to our guests through a monthly lucky draw for three consecutive months. Our winners will be some of the first 100 SXC astronauts in the world – to be more specific, the first 12 SXC astronauts in Asia. Their credits will be recognised in the Curacao Spaceport in the Netherlands,” the senior vice president explained.
Alex Tang, chief executive of XCOR Asia, said that space travel was once an unattainable dream, which has since come true in City of Dreams.
“It is my honor to collaborate with City of Dreams Macau, the leading integrated entertainment resort in Asia, and to inaugurate ‘The Space Legend’ in Asia. Participating guests will become one of the first 12 XCOR astronauts in Asia and also one of the first 100 XCOR astronauts in the world. This bespoke journey is regarded as unprecedented. As of today, no other resorts in Asia have created such a prestigious experience for its guests,” he said.
In a press release, City of Dreams said that the space journey will take people on a one-hour suborbital flight to as high as 103 kilomet
thanks John... good to have a handful of guys posting who can think here.
We do not offer advice to anyone we are not partners with... see my reply fornycdip below
As discussed here prior, one day soon Henny Penny, Macau and Beijing officials are going to realize their political corruption withhunt is going to cost them billions of tax revenue per Q, money they need to do the contemplated infrastructure (bridges, rails, roads), Hengquin and realted development programs...
Not sure this article marks the end of the witchhunt for tigers and flies, but if so it is IBDs first article with objective references and meaning related to Macau since Detar began writing about it.
Article quoted in IBD piece:
BEIJING - A campaign put a check on misbehavior by party officials may just be ending, but the Communist Party of China (CPC) is eager for yet more improvements.
The "mass-line" campaign began in June last year to improve the flagging relationship between CPC officials and the general public, by cleaning up undesirable work styles such as formalism, bureaucracy, hedonism and extravagance.
"The campaign has reached its goals... but Party organizations at all levels must not let up on the drive to improve working practices and should continue to deal with the problems exposed by the campaign," said a statement released Tuesday after a meeting of the Political Bureau of the CPC Central Committee.
Empty speeches, interminable meetings, lavish banquets and entertainment at VIP clubs were all targets of the campaign. Focused on officials at or above county level, Party members examined their own conduct, laid their problems bare, analyzed the causes and made plans to set things right.
"With strict standards, measures and discipline, the campaign helped officials solve their own problems. It had significant effect and won people's full support as well as positive comments from both inside and outside the Party," the statement said.
Party members have learnt to think for themselves and make decisions from the people's perspective. Many began sincere relationships by speaking honestly and being real friends with the people.
According to the statement, "a batch of prominent issues" that were closely related to people's interests and harmed the Party's grassroots foundations have been solved. Party officials and organizations at the grassroots level have improved their work capacity and sharpened their awareness of rules.
The statement called for continued action on misbehavior and a long-term mechanism to limit the power o
a final point on Studio City tables... the two guys wetting themselves on the SC topic are the same guys who "didn;t like" my comments about how incredibly ill-timed Shel's Spain ambitions were two+ years ago. These grumps have posted that bs about SC tables here too, but let the "grumpy old man club" squeal about SC tables... Our money is on Ho's take of "pulling their share" and we also believe his confidence emanates from discussions, as you wrote, "outside the public forum."
tbery, all excellent comments as usual from you
Re the FF LVS board, there are a few good posters there (notably our drjack here), but several of those guys, notably mrtaxxxx with however many "x's" he uses now there as a prime example, "don't like"(LOL) people disagreeing with the myopic bullishness they pat each other on the back with there... exclude drjack, the board moderator and only a couple others, and all you have is the myopic "grumpy old men" club that has been bullish on LVS since before Shel advocated the since abandoned "Spanish Empire building" nonsense even Shel gave up on.
That is the kind of thinking that leads one to never hedging downsides or trading around key core positions... and that group (many of them anyway) rode it down unhedged from $70+ to $35 and now again from above $80 to less than $60 until this week.
Those with a little more cap markets knowledge likely share our view that reading what bright, knowledgeable guys (incl various pm and c suite guys as has been revealed over time) share on these boards is often worthwhile, perhaps especially when such ideas are contrary to our individual perspectives.