They already said that of the $2.3B sandbagged ebitda this year, they plan to use at least the 2013 level of $800m on buybacks this year... we'll suggest that will be front loaded, because they plan to continue the UPOD mashing of sandbagged guidance followed by material beat and raise EVERY Q.
Those who are so unfortunate to be buried short here will find thier situation worsening by day, week and month as the European and Asian market momentum accelerates -- and as PCLN continues to take share in the U.S. market.
It's down to EXPE and PCLN friends... they will both seriously outperform the market, same as we said last year when expe pulled back to $48 and as pcln pulled back to just below $600 in Dec 2012.
Ho shares your enthusiasm, calls it and the Lotus bridge "game changing" for MPEL.
While everyone trading the U.S. based companies is all gaga over lvs, mgm and wynn meeting with officials in Japan this week, which MPEL is pursuing in the quiet "Asian way" as Ho describes his approach to gearing up the 2 year long beauty contest ahead, it is fun to note that Japan's market opportunity is thought to be about on par with the Vegas run rate of some $6-7B of GGR.
Meanwhile, Macau will do more than $40B of GGR this year, and that is with the current hotel room capacity of 2500 or so rooms being only 1/10th or so that of Vegas.
deleted my mistaken reference to Ho mentioning Thailand after the review and clarification noted above. Thanks matrix and grftt.
These boards tend to erode to a mess and predominantly useless posting over time, but fwiw we try to remain objective anyay. In this regard, I powered through my last three years of notes and asked my partner and associates if they had info on MPEL's comments about different Asian venues over time. The upshot is that while LVS and MGM in particular and also Steve have often discussed their ambitions to expand throughout Asia, MPEL has been quiet on the topic except for more recently discussing the "Asian way" through the japanese process (which Ho thinks will take two+ years of beauty contest and proposals,approvals before building process). Analysts have asked them about several potential new venues others gab about, yet, again, excluding Japan, Ho and his team (including the IR guy with staff) have been virtually silent on all of the asia pacific venues (even Russia past the press release).
Those include, without an attempt to be exhaustive: Japan, Taiwan, Korea, the Philipines, Vietnam, Thailand, Singapore (seemingly closed but perhaps not?). MGM's SEC file has at least once listed all of these potential targets as good places for their "brand" (maybe just hotels at first but adding gaming as the legislative process evolves in these domiciles). Thanks for the comment at the top, and again thanks to grftt below for his learned color. We look forward to watching Ho and his Board and exec team unfold their hand in the "Asian way" as Ho describes it.
forgot to mention the market in japan is thought to be some 7B or so per annum...
fun to recall that Macau was $37B last year, will likely grow another 15-20% this year, and already generates call it 7 times Vegas GGR, even though Vegas has almost 10x more rooms currently than does macau...
Here comes the H island rooms and infrastructure though... Macau will continue to be THE BIGGEST GGR venue for years to come.
And for the nervous nellies concerned that MPEL has been "lagging the group" for a week or so, you really ought toscreen on a log chart and compare relative performance over the last 15 months (Vegas and Macau based companies)... then, turn your screens off and go play some golf. LOL And don;t look now, but the stock is popping a bit as people figure out that MPEL is more likely front row than excluded from the planning for Japan... Asian pols and players tend to go for the venues with iconic Asian sensibilities... just like they do in Macau and will in Manila.
Saw your bs post before i signed on today. A few things just for you.
First of all. FY for trying to dis me. You are a pos.
Second, you have never posted anything here but your ignorance and stupidity, and have earned everyone here putting you on ignore, but if I see you try to dis me, i will, if i have time, oblige you compelling me to S on you pea brain.
Third, if you do not like my posts, you can first put me on ignore and then sit down to a big bowl of dog S and shovel it down you F putz.
Fourth, you have not a F clue who I am, but your stupid comments suggest your IQ is sub 90.
last, did I mention FY? FY!
This morning two of the brokerage firms issued first call pieces picked up on the wire services discussing that WYNN, LVS and MGM executives were meeting with japanese officials to discuss gaming in Japan, with the upshot being that Shel was very vocal about being willing to spend uo ti $10B or so there and even partner up with japanese investment concerns as long as they could be converting into risk takers. LOL
An interesting data point noted was that they would like to have at least the first casinos done in Tokyo or O before the Olympics in 2020 -- linging up well with Steve's earlier comments noted above regarding timeframe.
Now here is the interesting part... this meeting was apparently known about last week, and note that MPEL's Ho was not listed among the participants, likely leading some (uninformed) players on the street to conclude that maybe MPEL is not going to be part of the program in japan. Those who know Ho and the Crown and Melco connectivity might just grin... On the call last week, Ho essentially said that they very much planned on being part of the Japan venue, but that unlike some of the other players, He and his BOD and exec team would be playing their cards quietly, softly and in the background "in the Asian way." This is all very consistent with what MPEL has done in Manila, and as a few notes blazing around the hedge fund community male clear, they all know MPEL is in one of the quiet catbird seats on Japan -- but they don't have any horns blowing.
As you can see on the tape, this morning's divergence was one more example of retail/uninformed selling when the smart money is there with a catcher's mitt. Even we took a few more chunks. LOL
btw, a read back through the transcript shows that every analyst except Bain was surprised at the dividend... I'll suggest that is because the entire buyside community shares their concern that MPEL has heavy funding needs coming for Tower 5 and follow on to Japan, Thailand and where else? Again, mgmt has been good about emphasizing that flexibility and "bulletproof balance sheet" is more important than gearing a significant earnings (enitda) payout anytime soon, but they are also quick to make the point that ebitda will be large before japan's "beauty contest" as Ho describes it will require checkwriting and shovels...
Said earlier a couple times, but we think this is a huge underscore of MPEL's upod framework for running the business, and ebitda is going to SIGNIFICANTLY blow away street views of what this company intends to accomplish over the next couple of years with Cotai (COD and SC) as well as in Manila (where tables and machines were double last fall without any visible change to analyst estimates for 2014 or 2015 or long term discounted ebitda valuation or terminal growth rate used in buysiders' dcf valuation models. For the last time (maybe), we'll add that was out key reason for adding shares over the last two weeks.
Those playing the dividend peanuts don't seem to grasp how trivial that is to valuation these days... Crown and melco must have other projects where they want chump change incremental cash flow. LOL
We have run multiple scenarios on the ramp for COD Manila -- the baseline is for zero ebitda generation.
We've also studied what the sellsiders have published for the last few years. As a group, they are darn good at repeating guidance and running detailed spreadsheets that add no value... We have yet to see MPEL share any data on what they think the ramp will look like, but if you use just LVS' trajectory for the CS, Manilla will have more than call it none ebitda from Manila this year (LOL). The best input shared by Ho was in the Sep Q update broadcast last November... I emphasized what he had to say about it back then, also then noting that no analysts we knew of had any operating contribution coming from Manila then - again, they still do not to our knowledge.
Here's the best part (again repeating myself on this concept): If Macau grows "only" 12% 2014/2013 (we think it will be closer to 20% than 10-12% modeled by the sell side), and MPEL can come close to holding low teens share, it will comfortably hit the current revenue consensus for 2014, and between that and the cost containment and operating leverage focus effects, ebitda estimates are again too low. Notice that series does not include a contribution from Manila? (The lookback I suggested above will reveal what Ho has planned: out of the blocks POSITIVE IMPACT!)
See why we don't think much of the sellsiders in this sector?
Again, we don't see Bain's work but do give him credit for actually doing some independent thinking/forecasting, and while we think the MPEL dividend initiation news is less than a desirable outcome for the reasons detailed by us over the last three years here, Bain also had an inside track on phishing out the dividend news.
Bain has done better than the rest of the sellsiders seeing the upside on MPEL, and as you well understand, he continued to chase it higher all last year. As an aside, we don't think much of his recent comments on MGM though -- sort of like this SNL framework when one fills in the blanks.
MGM was hosed and now it is not so bad and may be able to continue getting modestly better if:
1. They can figure out how to do less badly than historically in Macau and the new property done in a couple of years is better than another weakest sister in Macau;
2. College kids keep the binge drinking party clubs going hard;
3. The MCE business continues improving back to even 2/3s of what it was in 2006/07.
4. Borgota doesn't fade to even more dead with the rest of Atlantic City as the proliferation of regional casinos throughout the eastern seaboard continues amok.
5. Rosanna Danaesque part: Never mind the difference between spending refresh money to fix the drab shab condition of 7 of the 9 properties on the strip ex Citi center no one with bankroll wants to play at.
6. Try to ignore that both WYNN and LVS have two properties on the strip -- and that both companies generate incredibly better ebitda relative to cost than even Bellagio.
7. Extending #6, forget that Macau ebitda absolutely crushes Vegas --- because like the Geico discount, EVERYBODY [running hedge funds focused on gaming that is] understands that Vegas is a dead albatross save for college kids, blue hairs pulling slots, MCE, CMA and tv poker events... the MGM casinos remain empty (especially for high roller tables/areas) and that is unlikely to change. See WYNN's latest results - some 75% of ebitda was from the macau property -- mashing even their best in group results at two properties in Vegas and the rest domestically.
We have run multiple scenarios...
had a large follow on post to tie this to Macau GGR data... yhoo wouldn't post it? POS
As background, see my "Macau GGR grew 'only' 7% in january yoy"
Update shorthand: Sand's China is telling the world Macau is cranking for February -- almost double last year's percentage growth on a far smaller base, despite the fact that last year's Feb results included most of the CNY week that began on the last weekend in january.
Then GGR jumped to 24% for March yoy, leading up to a year where everyone was talking about 12% yoy growth (less than Sands China's mid teens now for 2014) followed in upod fashion by overall growth of 20% for 2013. As detailed a month ago, if Macau grows only by 12% this year and MPEL can continue to largely retain share, then they need about nothing out of COD Manila to beat current estimates for 2014. Those actually studying along here know this set up for MPEL's relative outperformance is even better than the ebitda scenarios last year at this time (when the stock had climbed all the way back to $15 or so -- LOL).
A final thought for the Q, keep in mind that Crown mgmt and Melco corp each own 1/3 of this company. Add on mgmt's stake and over 70% of MPEL's ownership is locked into the very bright future that is going to unfold here, unless the sun explodes next year.
Also goog this:
China's PMI will not affect earnings: Macquarie
THU 20 FEB 14 | 06:39 PM ET
Sam Le Cornu, Senior Portfolio Manager, Asia Listed Equities, Macquarie Funds Group, is still upbeat about Chinese corporate earnings, despite the HSBC China PMI falling to a seven-month low in February.
To keep things in perspective, Bloomberg article suggests plenty of things to fret about on top of Chanos' list... and don't forget the sun is expanding and will eventually burn out -- a billion or so years after expanding enough to torch Earth in another couple of billion or so years.
Meanwhile, PCLN has some interesting data points to share on the expanding consumerism and vacation related travel in China. LOL btw, Do you think the currency data may be skewed a bit by Fed taper and that, just maybe, PMI and factory data is influenced a bit by the CNY effects this year?
The won dropped 0.9 percent, the most in a month, to 1,073.00 per dollar as of 2:16..
Asian currencies had their worst weekly loss in six months as signs of a deeper economic slowdown in China and the Federal Reserve’s support for tapering asset purchases weighed on emerging markets.
South Korea’s won led the declines as a gauge of manufacturing in China, the nation’s biggest export market, fell to a seven-month low. Thailand’s baht had its steepest five-day drop of 2014 as anti-government protests turned deadly, while violence in Ukraine also damped sentiment. Fed policy makers backed further stimulus cuts at their January review... a program that drove capital into developing countries.
“Investors remain cautious and are concerned about downside risks coming from a slowdown in China and political instability in Thailand, Ukraine, Turkey and Argentina,” ... “There are potential outflows to Treasuries as the Fed tapering is likely to push their yields up as well.” (No #$%$?)
The Bloomberg JPMorgan-Asia Dollar Index (ADXY), which tracks the region’s 10 most-active currencies, declined 0.6 percent last week, the biggest decline since Aug. 23, to 115.33 in Singapore. The won dropped 0.8 percent, the most in a month, to 1,072.09 per dollar in Seoul...
A preliminary Purchasing Managers’ Index of factory output in China fell to 48.3 this month from 49.5 in...
Have a look at a monthly log chart over the last 5 years... and yet with 25% sandbagged rev growth forecast, this story is still very young, particularly as europe and APAC zoom from here. Did you miss the part about taking U.S. share or car rental book up 32% and more to come?
PCLN is going MUCH higher this year -- starting Monday.
btw, See mahaney's paper if you missed it. "cheapest big cap internet stock of them all" (incl GOOG).
Cover your 4 shares, kick the wall, and move on already... the only reason pcln went down to 1315 late was the option expiry.
The only "blood" here is going to be the continuing stream of margin dept closeout of really stupid unhedged shorts... but then we have been saying that since the last dip below $600.
The RIP to $1500+ this year resumes Monday.
Funny... you think that the return of blue collar credit union customers to buy cars, trucks and to the abandoned suburbs to rent formerly foreclosed housing for about 1/3 of what they would have cost in 2007 is "surging" and "incredible" economic recovery?
Credit unions don;t lend money to hourly employees to game, and serious gaming is not coming back to Vegas. Locals who do play frequent BOYD casinos...
But yeah for MGM! Almost back to not losing money. Awesome!