Wynn Resorts just put out a horrible sign for Macau
Business Insider By Linette Lopez
goog title for dippy report
Linette Lopez' little rehash on the title above of the 14 things that have been negative headlines on macau since last summer came out contemporaneously with the ill-timed, wrongway thrust of Nomura's latest blitherings...
The fun part is that late yesterday, Li, Beijing's point man to Macau, told Macau govt officials and the Beijing press that they need to avoid "sacrificing" Macau's primary business of generating gaming revenue for the stated purpose of "diversifying" Macau's economy.
We've been discussing not choking the Golden gosse that is Macau's principal reason for being and that gaming is the ENTIRE tax base and driver for henmgqin and surrouinding economic development as well as Macau's future on the MPEL board, and those long WYNN or LVS may enjoy a few posts today discussing Nomura's report and Li's comments indicating that Beijing is now dialed into the harm they are causing Macau and the region's economy. Seems they care about that, even if they don;t care about casino owners and their shareholders.
Steve's action here and "aw shucks" humility on the last CC was well played... Beijing is finally hearing the message and now talking about "adequate diversification developed over the next 20-30 years" vs "We want massive and immediate diversification." As the street figures it out and Beijing lets Macau's new regime grant "fair and reasonable" table allocations for all of the new properties coming on line over the next 15 months (Galaxy 2, MPEL's Studio City, LVS' Parisian, and then Wynn's Palace), these stocks should begin to discount the now major upside in these names. Great set up for the reversal maybe just days just ahead now...
Lazlo is one of the most brilliant quant/chart guys on the street... he was just on cnbc sharing his updated outlook for the broad market with a juiced S&P500 target of 2250 (up more than 8%) by June 30th, not yr end, by June 30th... those who know his work know how good he is, but fun to think about MPEL being a great set up:
1. trading at full washout levels again,
2. I day old heads up on better sentiment coming out of Beijing,
3. manila ramping likely better than "gloom and doom" analyst numbers,
4. Studio city table allocations will likely be consistent with their diversification efforts there and #2 above,
5. excitement of Galaxy, MPEL and LVS openings this year, and WYNN's new 8 acre lake Palace opening mid 2016 -- followed by sewveral other new openings incl the iconic Tower 5 at COD Cotai.
Hopefully MPEL turned on the buyback lights today... overdue now while a mm long did the sloppy bail today (and a Nomura client covered in? LOL).
surprised Nomura didn't throw in clueless comments that the HK delisting is a negative along with their kitchen sink for of wrongway comments...
Nomura's comic piece issued yesterday was very unfortunate for them, predicated, as it were, on the notion that Beijing is out to shut down Macau gaming. So, just ahead of this clarion bell ringing from Li that Beijing (and so Macau) demands for "diversification" have been too much and now the light switch is being thrown that they suddenly realize "diversification" needs to be only "adequate", not omni pressing, we can expect the rules and actions will immediately begin showing up as eased on Li's 20-30 transition period (maybe they will build another connected island as the land bank is tied up now LOL).
In total, this Nomura piece reveals just how out of touch most analysts are in this sector... but nomura's are japanese so they likely have never been in any of the Chinese companies' offices anyway. "Gloom and doom" sky is falling news from them -- likely almost to the day at the bottom -- as stupifying and upside down as matrixputz's call in January 2014l for $75 by EOY 2014.
Nomura said so much as Beijing is out to get macau and crunch gaming and corruption as if those terms are interchangeable, concluding that that VIP and GGR are hosed at least through 2015. They also laundry list social unrest, labor issues, unmet "diversification" demands from Beijing and Macau politicians, funding unavailable for smaller junkets and others going bkr.and my fav was their drivel about VIP was down serially to despite the increase in VIP over the last three days of Feb? LOL There was precious little VIP and premium mass for the three weeks leading up to the last three days because of the calendar differential to last year.
We'll see how things play out fwd, but Nomura gimped on any notion of the four new resorts creating some new buyside interest in the group. So lines are drawn: Morgan Stanley, Union and Citi have just gotten back to positive -- same week Nomura decides to stick their neck out 180 degrees wrongway on Beijing sentiment toward Macau gaming. LOL
Central People’s Government Liaison Office Director Li Gang said in Beijing on Thursday that the gaming industry must not be sacrificed in return for economic diversification.
Li, who is a local deputy to the National People’s Congress (NPC), made the remark during a group meeting with fellow Macau NPC deputies to discuss Premier Li Keqiang’s work report that was presented at the Great Hall of the People earlier in the day.
Macau has 12 NPC deputies including Secretary for Economy and Finance Lionel Leong Vai Tac.
Li Gang said that the monthly declines in Macau’s gaming revenue since the middle of last year were not a bad thing per se since they were compelling Macau to think about sustainable development and economic diversification.
Li Gang said one should, however, not deny the fact that gaming is Macau’s leading industry and that, consequently, the gaming industry must not be “sacrificed” in return for economic diversification. Therefore, he said, it was necessary to add the word “adequate” to economic diversification.
Li Gang pointed out that the government will conduct a review of the gaming industry from the middle of this year.
Recalling that President Xi Jinping told Chief Executive Fernando Chui Sai On during his inspection tour of Macau in December that gaming shouldn’t be Macau’s sole dominant industry since it would eventually hit a ceiling, Li Gang said that Macau needed to raise its awareness of unforeseen developments and risks.
Li Gang also said that the tightening of visa restrictions and the ongoing anti-graft campaign in the mainland were not necessarily the main reasons for the current drop in gaming revenue. However, he admitted that the central government’s anti-corruption drive did indeed deter some government officials from visiting Macau.
More clear illustration that Beijing and local govt officials want to protect Macau gaming... understanding that the translation to English is sloppy (replace"sacrificed" with "impaired") great news to see the policy worm is turning in favor of Macau's "special purpose" Golden goose. Would be great to see MPEL was on the bid this morning...
Mar 06, 2015
Macau gaming industry should not be sacrificed: Li Gang
Beijing’s main representative in Macau said the benefits to the local economy created by the city’s gaming industry must not be surrendered in pursuit of economic diversification.
Macau should pursue an “adequate” economic diversification, said Li Gang (pictured), director of the Central People’s Government Liaison Office in Macau. His comments came during a group meeting with Macau deputies to the National People’s Congress in Beijing on Thursday, reported the Macao Post Daily.
According to the newspaper, Li Gang described the gaming sector as Macau’s leading industry. As such, he added, it should not be “sacrificed” in the drive for economic diversification.
Macau’s casino gross gaming revenue in February fell by 48.6 percent year-on-year to MOP19.5 billion (US$2.4 billion). It was the first time in four years Macau’s monthly gaming revenue tally stood below MOP20 billion, according to official data. It also extended to nine months the period of consecutive monthly year-on-year decline in Macau gaming revenue.
In early February, Li Gang said the city’s casino industry had entered “an interim development period”, and that there were various reasons for the casino revenue fall, not only the anti-graft campaign in mainland China.
However, on Thursday the official admitted that the central government’s anti-corruption drive had deterred some government officials from visiting Macau.
Li Gang also said he expected Macau’s economic diversification to take between 20 and 30 years to achieve, according to the newspaper...
goog title for full
Good to see Macau and Beijing officials figuring out that rhetoric pressuring the "Golden Goose" (macau gaming revenue) is really short-sighted. Here's some more reading for CE Chui and new finance secretary Leonel Tac -- and Beijing's Li needs to catch up on some reading too. LOL
ignoring the factual/causation distortions, goog title of this article from last night directly on point:
"Asian casinos woo Chinese as corruption drive hits Macau"
a final rehash point, no one on the buyside cares what most of the players comprising this weak analyst group have to say from one cycle to the next. With only a few exceptions, this is one of the weakest clusters of all sectors, and what they have for ratings and estimates doesn;t matter much other than as a contraindication because they have, collectively, missed the last 5 important inflection points. The three firms (Morgan Stanley, Union Gaming and now Citi) that have gone back to BUY ratings may be early, but at least they have a chance of distinguishing themselves from the 6th time the consensus missed the turning points (up or down).
As per the 13Fs over the last two Qs, the value guys are all doing their own modeling and have long been more conservative than the street. Sterne Agee's David Bain is a classic example. As you and "puthimon" have pointed out many times on IKGH, he has been terribly wrong on that stock too... to my knowledge, no one managing money professionally even sees his work, let alone cares what he thinks.
thanks for the comment and enjoyed clicking through "see messages" to learn you have had many erudite posts calling out our Shirley Mason poster here (toast, drjackoff, janetate, brinerbriner, jugheadus, and another ten or so tired nonsense alaises).
Did you see my post on the analyst ratings topic yesterday? I do not share your view that the analysts are "still too bullish"...
"HSBC Lowers to hold
2/3 of the street now rate the U.S. listed Macau names hold or sell. Just now it would be great if all the "esteemed" analysts in the group would pull their buy ratings, but , hey, the consensus is already more negative than it was in 2012... you know, with LVS at $36 and MPEL at $12... this "brilliant" (not) analyst group got that negative just in time for the rocket reversal to over the following 15 months."
Prior to this HSBC report -- and Morgan Stanley and Union Gaming going back to BUY ratings over the last few weeks, more than 3/4s of IBES published ratings were either hold or sell... as stated above, with these 3 analysts back to BUY that is still more negative than this really weak analyst group was back in 2012 with MPEL at $12 and LVS at $36... the cycle lows for both stocks.
Your other point was that you think MPEL is finally being "priced [better] independent of its peers." Given that Manila and Studio city costs of carry have been in opex and capex without any revenue until this year, and that MPEL has the best ebitda/table and highest percentage of mass to total GGR in the group, MPEL merits a premium ebitda multiple to the group... yet it continues to trade at the lowest ebitda multiple of the group.
Another point worth considering on this topics is that Ho has emphatically said last month that he thinks COD Manila will significantly outperform street consensus next yr. Altira's has also been repurposed to focus on VIP tours... progress seen already last Q, and two new salons were opened the last week of february...
"marketmaker" is a new poster here with a skeptical reply on my Citi "Turning Point" share last night on Macau, but civil, thoughtful and interesting nonetheless... I clicked through to "see messages" to see what else he has to say on Macau learn that he, along with "puthimon", has been calling out this board's Shirley Mason on the IKGH multialias nonsense for many months now.
Seems "marketmaker" and puthimon both figured out how ridiculous toast/janetate/drjackoff's multialias bs is on that board, way before Shirley revealed her multitude of moronic, diversionary aliases here. Talk about ironic and disgenuine... Shirley Mason Janetate/
drjackoff/toast/brinerbriner/jugusheadus/darqnight/tahoejack/fkuimbecile/fkuholley/fkunyc and all the rest posts his negative bs here on a dozen or so aliases, and has used at least 4-5 of those to post the same topics as positive developments on the IKGH board, having ridden that down from $8 to $1. What a great argument for yhoo to at least limit each board to one alais per IP address.
Funnier is that Shirley uses several of these to not only post, but carry on conversations with himself on these two boards -- and also SWKS and SUNE which I know of because he reached out to me on my "ed" email on both and are readily seen on his "see messages" click through -- actually going so far off that he compliments himself for sophomoric "analysis" on several of his" analyses of these companies... then he has the stupifying insolence, like a little girl on AOL, to attempt to dis me with the repetitive bs of matrixputz and janetate, suggesting I lack integrity and spend all day posting here (when i typically ave maybe 20 minutes a day scanning all chat rooms of interest for items to review further (e.g, media summaries/grftt's visit updates), and share perspective with worthwhile audiences I know are reading target forums.
for those wondering about Shirley's post trying to dis my integrity this afternoon... someone that good at using multiple aliases ought to know a little more than nothing about IP addresses. LOL
If anyone misses drjackoff, ad hominem Shirley still posts using that alias on the lvsforum as of my last visit there two months ago... thankfully "she" still posts David Bain's cheerleading "research" under janetate and toast aliases -- for where would we be without Bain's "top of class" PT that stayed at $58 ftm until last August?
fabulous looking... I don't recall seeing the ante "red carpet" lobby in the drawings, so terrific to see it is almost enclosed now. Agree it looks great and "Oscar Ready"... thanks for the share Dave.
The 13Fs tell that story over the last two quarters... the legit value guys are back to large long here with most hedges pulled (save perhaps some paired trades with others on the short side) and the momo guys are off chasing new windmills with Don Quixote of la Mancha. LOL
Pending news on the catalysts, incl Manila ramp, Studio City tables, softening Macau gov't sentiment toward the "edge"/special competence of macau being the gaming mecca Golden Goose)... the option monkeys are having their interlude of antics... let'em string themselves up and prepare to hang high. We'll see where the stock is in a short while (hint: it won't be up to Shirley Mason matrixputz's 2014 PT of $75 this year if we were guessing, but maybe next year as Manila and Studio City ramp, Tower 5 opens, Altira gets running hard as THE elite VIP destination, and then the street figures out how getting the 2100 rooms for Studio City "expansion phase" open by July 2018 will impact ebitda.... and maybe Abe will have an update on japan by in a year or so from now. LOL
When i am in the office, I do spend much of the day reading SEC files and reviewing our team's models and reading published research. I even share much of it in excerpt form when I think the emphasis is worth my time for the guys I am sharing perspective with here (it ain't you janetoastdrjackoffmatrixputz). That is why I know much that you have no clue about, be it capex, ROIC, adj ebitda metrics and what not). Several here -- even you -- have seen some of our modeling and I've even truly wasted my time helping you understand errors in Sterne Agee's work and reports (e.g., Manila) as now borne out on public commentary by Lawrence Ho. And it is a pure delight that ideas you have tried to suggest we were hosed on were actually complete victories (TRIP, PCLN, EXPE, HTZ etc) Suk on that you miserable chump.
Talk about spending all day on message boards -- you do precisely that here and on IKGH and SUNE that as you have revealed. You are a head case drjackcar,toast,janetate, dthe98, brinerbriner,jugusheadus and a dozen more you ironic little "ad hominem" dope.
As for all those yous, I have pointed out your "slips" revealing your machinations here, and so has "puthimon" on the IKGH board. So you have amply demonstrated you are one and the same dbag... play pals with one and aholes with others while you carry on conversations with yourself here and on IKGH while going ape trying to convince me and everyone else to chase your dippy IKGH and SUNE while you advocate shorting this as janetate and the rest while feigning long as toast. Do you think all here are
Thanks for the entertainment here though. Keep on sweating those moronic short-dated calls you idiots write, and do stay short if you have any capital left to lose. Wait, you must have someone paying you to do this nonsense -- it is clear you are on the wrong side of most of your "trading" ideas, if you actually trade any of them. Now get back to those incomplete leaps with your leapfrog friends Sybil. LOL
The report covers recent topics that have been distorted or just plain errantly handled by the media and lesser analyst teams. They get it right on the group vs individual visitation topic and point out recent signals of a change in attitude by the Macau govt (see my post on protecting Mcaunese peoples' "livelihoods" from earlier today):
"... government now does not wish to reduce the number of Mainland visitors coming to Macau. Instead it wants to ‘improve' the issuance of visas to independent travelers from Mainland China under IVS" as contrasted with the "group" VS that has caused problems for both HK and Macau.
They also get it right that VIP is being re-rationalized on Macau. Anyone doing real study here knows MPEL is less reliant on VIP in macau than any other company (85% of ebitda is from mass), citi suggests VIP will remain subdued as the smaller, lesser funded operators are marginalized or simply shut out now as rooms/floors have been reallocated to the big, quality tours. suncity now has new salons at both Altira and Wynn's resort.
They also discuss why they view Galaxy 2 opening in months) and LVS' new Parisian (soft opening scheduled for late this year)are likely to get small table allocations vs Studio City and Wynn's new Palace (due open mid 2016 now) and rave about Studio City hitting it out of the park on addressing the Beijing/Macau mandates to "diversify" and strive to attract more "tourism" to the island and Hengqin territory.
remedial reading just for greg5thtrader... read from start to finish.
and how about the matrixputz alias trying to dis me like an 8 year old moron here... nutty funny. When i suggested some might want to lighten at $43+ last january, he hyped that this stock was going to $75 in 2014. He was still hyping the stock when i explained why we took the hedge off the core and sold out the trading sleeve (that's right matrixputz, the "sleeve") and reloaded that at the 50d ema in Feb (~$38), then selling out the trade piece again at $43. We even discussed why we were doing that despite the 40% YOY increase in GGR for Feb.
Of course, longtimers know I have clarified this several times. I think matrixputz is #$%$... he can;t be the same player as Shirley Mason (the latter known here by many underhanded, decitful and otherwise disgenuine aliases incl: drjackcar, toast, janetate, fkuholley, fkuimbecile, fkynyc, mytek, blaqnite, dth98, etc),
Speaking of dthe98, i see where that alias is now trying to dis Grant Govertson again, having made an #$%$ of himslef two weeks ago on Grant slamming out of cluelessness... So now today Cit's analyst group is calling the "turning point" for Macau -- along with Morgan Stanley and Govertson's firm.
I hope all these moronic weekly call option players have fun under the tires one day soon. LOL
Yesterday Macau's CE Chui told the press they are evaluating the Individual vs group visitation topic and will be deliberate and balanced because the "livelihood" of Macau residents needs to be protected.
It seems he and the new finance and social secretaries as well as Beijing are apparently getting the message that their "Golden Goose" (Macau's gambling tax revenue and the driver for ALL of Macau's employment and economy generally) is a highly coveted object, and VIP tour operators as well as premium mass players, whom have alternate funding vehicles and travel flexibility, will go to alternate venues if political whim and caprice of Beijing and Macau leadership persist on discouraging Macau patronage.
On top the new Leung Tac's (new Finance Secretary in Macau) acknowledgements of the same ilk, e.g., Macau's "edge" is to be the premier gambling destination for the Asia Pacific, this is affirmation that leadership is aware they need to protect their "Golden Goose," in other words, avoid causing GGR to erode away from Macau.
2/3 of the street now rate the U.S. listed Macau names hold or sell. Just now it would be great if all the "esteemed" analysts in the group would pull their buy ratings, but , hey, the consensus is already more negative than it was in 2012... you know, with LVS at $36 and MPEL at $12... this "brilliant" (not) analyst group got that negative just in time for the rocket reversal to over the following 15 months.
The analysts and others must have the clients that are writing all the calls between $24 and $28 or so -- not just out to April, but in March, April and July. And right when Najarian and other option mpnkey's think the options matter so much, they really ought to consider that ALL of the calls combined are equal to about 1 day of trade here, and that is without any accord to paired, verticals, collars used as hedges and similar offsets. Those trading the ridiculously speculative weeklies as one way bets deserve to have their premia confiscated...
Institutional longs are smiling...
Galaxy's table news will be interesting vs the rumor they will get a small number while MPEL will fare better in a couple of months. These company's need those numbers to finish fitting out the new casino floors/construction.
Per filings the "expansion phase" for Studio City is still under review by MPEL and "partnership" with gov't officials, but they have aired ~2100 new rooms in program as this second phase is developed. While they no doubt want to see tables and a more supportive policies out of the new macau regime (so far, so good apart from crowd rhetoric witness LVS approvals within a week of the new Finance secretary swearing in) and a re-rationalized table policy, at least with respect to co's incl MPEL actually making a hard run at "diversification" to promote "destination" tourism and not only gaming. Studio City phase 2 is to be done by July 25, 2018.
The future is bright for Macau and MPEL...
MPEL announced yesterday that the HK exchange delisting is proceeding. They'll be off the HK exchange on July 3.
As discussed here when they first mentioned the topic, this will save them the superfluous regulatory filings/notices that more than double the paper shuffle required for the NASDAQ listing. no brainer as 99.99% of their trading volume is on NASDAQ since the ipo.