We know both Shuli Ren and the MS team are worthless in assessing Macau prospects and figuring out what is relevant to the individual company stories, but given all the now very public refutation of the stupidity and ignorance these people have diseeminated on behalf of hedge funds, it is unimaginable they would continue to spew such garbage. I'll pass on a lengthy stomp here, but a few quick notes to highlight the atrocity in Shuli Ren's latest dippy "real time, market moving news" -- even though she and MS again have it all wrong and the market now understands that. LOL
Shuli says "Among the Macau stocks, LVS seems the consensus overweight, for its exposure to the fast-growing, profitable mass market gaming segment." It may be that a handful of idiots think that, but no other company is mashing it out of the park like MPEL on mass and premium mass, adj ebitda and footprint expansion f18m from here. Additionally, MPEL is pure macau until they open manila -- the key part is MPEL does not have the deadweight of the Vegas strip and other U.S. venues, or the threats online gaming and increasingly ubiquitous casinos here are having on further Vegas gaming erosion.
MS ev/ebitda numbers must be leaving out out adj cash/ST investments; MPEL has alot now to build out Manila and Studio city as well as Tower 5 over the next two years. For real analysis of EV/ebitda and adj ebitda, see Bain's work. He understands and that is why his work shows MPEL to be the cheapest EV/ebitda stock in the group. did I mention lately MPEL's adj ebitda continues to grow faster (and their ROIC is higher) than any company in the group?
Dividend yields and int expense should not be in the relative value equation. MPEL will pay only a modest div/buybacks until the huge development queue isdone incl phase 2 of MSC. P/E is the same issue -- ridiculous way to assess mpel's value now as earnings aren't the math for the story. ROIC and ebitda math are it -- tho idiots do not get it yet.
The Motley fool article makes it sound like the Hyatt hotel is just now signed up to be built. Yet the exterior of the buildings are done and the interiors trims are being wrapped up, likely including the recent bump in the budget for the enhancements Hyatt wants done for their piece of the pie. But finishing touches aside, the property is on full steam ahead for the partner-confirmed target opening date of October 1, 2014 (start of Golden Week!).
The article also says the room count is smallvs Macau Studio city (he is apparently unaware of MSC having the initial phase and already working on the "expansion phase" design and plans), adding an upbeat spin to that by saying "but it's a start" and then adding the sidebar that there are other rooms there in Crown and the boutique. Yet all of that is miscued... COD Manila's three hotels (Hyatt Crown Resorts and Nobu) will have a total of 946 rooms, including 300 VIP suites. It will be spectacular and draw visitation from wealthy japanese, Koreans, and many Chinese from various regions in addition to other international tourists, gamers and business-oriented MCE business.
The best part the Manila part of this story near term is that with a couple of analysts and journalist suggesting "losses" will be coming from Manila when it opens, the reality is that preopening costs have already run some $75m (excl financing costs) for MPEL's share... but once it opens, revenues will mitigate that operating margin (and ebitda) drag. Even Sterne Agee's Bain (easily the best analyst in the group in our minds) has yet to incorporate and revenue for Manila yet this year... but read his last couple of updates shared by drjack here -- Bain knows there are some "upside" catalysts coming right up now for MPEL.
Owning the sector & MPEL since April hasn't been much fun for anyone who joined the chase higher on this stock above $38 on the double top, but barring calamity for Asia's economy, the next couple yrs s/b lots of fun for longs.
MPEL is up some 20% since the double bottom retest low on June 10.
PCLN is up more modestly... only 2.5% since my post... but it is about to get going hard in the runup to earnings, followed by a tear higher after that.
Love to see all the short tarts with interns "bashing" here -- more like showing their stupidity and ignorance, a darling combination opposite our thinking on PCLN (and expe and trip). LOL
see my reply to this guy's nonsense above... the stock never should have come under the siege it did... As I have suggested, barring an economic collapse not reasonably discountable except as severe left tail risk, the bottom is in after a way oversold condition... the reversal should be even more stunning as the real news begins being discounted again; it's already up close to 20% from the bottom as you know.
For us, the fun part is that every naysayer will be in disbelief as this rips back to $50+ when they report the Dec Q come next February... glad to have them on for the entertainment value.
Fun huh matrix? You called for an up $2 day a week or so ago too... nice. So here we rip to above $35 and the best part is that the stock has a huge runway ahead...
Here's the post matrix referenced re the knuckleball catcher's mitt -- the stock is up some 20% since the comment was made on the retest/double bottom low. LOL
"squeezetracker • Jun 10, 2014 2:43 PM
the group is bouncing... those who want to add might want to wait to see if those dumber than dirt can push it down to a retest of today's new low while some of us stand around with the knicleball catcher's mitts. LOL
We think anything below $35 is cheap vs what is coming for MPEL. Our PT remains $50+ Less"
So... as for the slew of Shuli Ren (Barons) and the sellsiders' nonsense "real time market making news", where is the update to say "As for all of our bs noise on Macau, please don't be mad at us, we aren't very bright and have no idea what any of this stuff actually means."
Here's an outline for a new update Shuli. LOL
UnionPay atm withdrawals noise? Over and done.
Visa noise? Over and done.
Smoking limitations? Yawn.
HSI has nothing to do with why this stock is going to RIP over the next several months into EOY...
And when important news hits in china (UnionPay bs fade to mashed into the pavement with the last of the idiotic shorts) 12 hours before our market is open, you can expect the U.S. markets to follow the move on the HK exchange.
As for the HK exchange, I have pointed out many times that the volume there is extremely muted... Packer and Ho's combined 68% ownership has not traded since the ipo), and anyone using that as a benchmark for anything simply doesn't understand... ands though typical volume is say 30-40k shares vs 3-4 M shares on the nasdaq, the HK total needs to be divided by 3 to have a U.S. ADR equivalent. LOL
As for you are going to "sell and then go short around 9:45? Ya, sounds an awful lot like you went short into last night's close. Nice trade... you must be the last of the Mohawkins [sic]. LOL As we are fond of pointing out, it is always fun to have "geniuses" opposite our thinking...
We are playing here for where the stock will be in February, but 3 minutes to go until your 9:45... ROFL
Yesterday the stock closed at $33.91, right on the 50d ema and up 14% from the successful retest of the double bottom low (notice there have been only 2 down days since and those were low vol tape vs the 50d ave) of of $29.76.
The second leg of the base drop undercut the prior low and is now looking like the recovery leg of a proper "W" with a buy point of call it $36.75 or so (some tech guys would suggest the mid point can be used as the pivot driving a buy point of $35.83). With just a little more mashing of the bs noise such as today's stomp of UnionPay nonsense, it shouldn't take long for a "golden cross" back above the 200d ema at $36.30 (the more important 40w ema is $36.70)... these levels may be taken out as soon as this week when everyone figures out that it is a Baby Ruth in the pool, not something no one would consider eating.
Of course, those with an eye on charts as an ancillary tool -- and primary focus on the most important thing about the MPEL story, adjusted ebitda, ROIC and expansion of the both of those overlain atop the biggest footprint expansion of the group f24m, have likely been adding on fundamental and quant analysis for the last couple of months.
Here's a big surprise (NOT) to anyone reading here with comprehension since March: the bs noise on portable UnionPay terminals in casinos is slain and over... and, from the big bad wolf/lions and tigers and bears dept, jewelers won;t be able to add ADDITIONAL cash withdrawal/atm machines. LOL
"Macau’s government banned jewelry and watch retailers operating in casinos from adding new card devices starting next month, adding to moves to regulate money flow in the world’s largest gambling hub.
While banks were asked to strengthen the monitoring of large cash and card transactions, the government hasn’t asked jewelers in casinos to cease operations or move out, Francis Tam, the city’s secretary for economy and finance, said in a statement yesterday.
The latest move follows a crackdown on the use of state-backed China UnionPay Co.’s hand-held card swipers within casino resorts amid concern that illicit funds are being taken out of the mainland into Macau. Shares of Galaxy Entertainment Group Ltd. (27), the casino company that helped make Lui Che-woo a billionaire, and those of Sheldon Adelson’s Sands China Ltd. (1928) surged today after the government’s announcement.
“Macau government clarified the policy on the use of cash cards, that it hasn’t asked jewelers to move out of casinos,” Steven Leung, a director at UOB Kay Hian Ltd. in Hong Kong, said by telephone. “It gives investors some degree of comfort to bargain hunt.”
Shares of Galaxy Entertainment rose 3.7 percent, the biggest jump since May 30, to close at HK$59.50. The stock pared its decline this year to 14.5 percent, while the benchmark Hang Seng Index has lost 0.5 percent. Sands China climbed 4 percent to HK$57.20.
Wynn Macau Ltd. (1128), the Macau unit of Steve Wynn’s Wynn Resorts Ltd., jumped 5.5 percent and MGM China Holdings Ltd. (2282) rose 3.7 percent. SJM (880) Holdings Ltd. climbed 3 percent and Melco Crown Entertainment Ltd. added 3 percent....
See full article on Bloomberg
As i said last week, we were adding on the gifting below $33... absolutely great to think these morons still think shorting GGR data, without any understanding of the differences and subtleties of VIP vs mass and what surging mass means to property efficiency and ebitda, is a good idea. Actually we love all the shares we;ve added down here below the 200d ema. LOL
The airlines, hoteliers and travel bookers (PCLN) are a similar story... all of those sectors are running full and at robust pricing, and things are only improving in business and retail travel... so, if you are a moron, you decide this is a great time to short companies trading at, near or w/airlines, at half the broad market multiples even though they are growing at twice or more the broad market in rev, ebitda and eps and buying in shares with both hands -- because they have the forward book and know things are going to get even better.
I know you remember what happened back in 2009, and then again in 2012 -- just as all the idiotic sellsiders in this sector lowered their ratings and PT (MPEL at $13, LVS at $38, etc) we suggested that guys actually managing real assets (vs a pissant trading sleeve for a hedge fund with drivel posting by interns and other HK tarts posting for 10 cents a post here with broken english)... within a year, the stocks had doubled or more. Here comes the next RIP...
The noise surrounding the sector would dissuade most pm (most of whom don't know much abouyt the sector except that it outperformed last year) from owning stocks that are perceived to be at risk of having their revenue growth coming down hard for the foreseeable future.
That is why all the hot/momo money left last Q as the solid sector pm added to positions between $37 and $45... it is also why the solid sector pm continued to add since then.
Yesterday the idiot analyst at WFC and others of late have suggested there are no catalysts to push these macau stocks coming until 2H14... but that too is as stupid as their collective drivel was about pushing the stocks down. As noted prior, the box hedging by the legit smart money is off and now new buys are adding to a 100% long position. Moreover, other pm who aren;t so dialed in and saw the big drops while waiting for an entry point are not listening to the idiotic analysts telling them there are "no catalysts".... the IMPORTANT catalyst for the sector, and ESPECIALLY MPEL, is that more broadly the street has now begun to figure out the entire premise for the naysaying and big drop was bs.
Yes MPEL's ebitda and adj ebitda is going to more than double, and, far less meaningful while the huge footprint expansion inManila and MSC and Tower 5 is underway, yes, eps will also soon soar... Simply, the bs noise is quietly -- and yet quickly, coming out of the shares, a catalyst in its own right as the stock is now up some 14% from the low last week. The bigger move is just about now too... the valuation will soon begin discounting what is coming, and all of the idiots who dropped their buy ratings and wet themselves over "lower entry points" coming will be the big joke laughed about by the pm who took advantage of all that funneled stupidity and media over the top of the poop pie.
precisely... with respect to GGR that is...
and then the house benefits from reduced concessions to VIP tour operators and players. The resorts have fuller occupancy, higher ADRs (think rack rate vs free rooms), full charge steaks/lobsters, drinks, champagne, bordeaux and burgundy vs all of that getting comp'd out, paying patrons for the shows vs concierge handouts, private jet transport vs folks coming in on commercial flights and ferries (soon it will be the bridge and rail system) and so forth...
Excellent and piecing view... it has all earned a little more mashing than that though, moving from "OMG... explanable slowdown..." to this:
"ummm... Now that the yahoo board posters and David Bain have explained what is going on about 60 different ways and times since April, we are beginning to understand just how stupid our running commentary on Macau, GGR, UnionPay, Visas, WC, VIP, China growth, shadow banking, banking system, credit to junkets, real estate, corruption and the other screams involving Macau's pending collpase has been. In fact, those of us with a half wit or more are just beginning to realize how badly the hedge funds have abused us and the pseudo-journalists "following" and writing about Macau and that we should all be hanging our heads in self loathing and disgust, but instead we'll simply try to put on a happy face and begin talking about how good Macau is for its citizens, tourism, tax revenues, infrastructure/development and the economic future of China and the Asia Pacific region."
Great post drjack -- thanks. Bain's work copntinues to be about the only seelsider with any relevance these days...
LOL the morons put on a daytrade short over the first three minutes of tape this morning, likely based on algo triggers for GGR last week and market share "pinch" -- without even uynderstanding what is happening in macau or with MPEL and that such metrics are at best errant and wrongway perspectives on MPEL. We quickly pounced on yet one more compelling chance to add while the "slaivating" opportunity lasts.
Now those same tarts get to chase this all day to cover at the smallest loss possible. They'll signal they are done shorting soon... they'll all be back to hyping the story once it is pushing back to new highs, yet unlike our view back in January (too much too fast), this time it will be sustainable as it is already time to begin discounting some of the pickup coming for COD Manila and MSC.
While we wait, fun to think MPEL has sufficient FCF to keep bumping that little dividend to finance Packer's cash needs at Crown Resorts and Ho's ambitions to set up the ok Corral in Russia through his other company so as to avoid putting his MPEL shares at risk on the political trauma possibilities there.
Great post and LOLOLOL that the idiots have no idea what you are talking about. Last year they were running 50% VIP; this year mass, including conversion of some VIP to direct credit premium mass, they are running only 25% VIP. That dynamic figures hugely in percent of overall GGR... yet it leaves the quality progress in terms of enhanced property efficiency (i.e., major pick-up in drop, win rate, less operator commission, and much better overall adjusted ebitda significantly outpacing net revenue growth.
The best part? The clowns shorting with their little trading sleeves here don;t even understand the metrics we're discussing here. LOL
As validation of my comments below re MS assertion that MPEL's "[ave daily] mass win per table fell... and was surpassed for the first time" is likely incorrect, David Bain's 1Q14 estimates of MPEL's win per VIP and mass table is some 5-5.5% higher than WYNN for VIP and mass, respectively. LVS is well back from there...
Given that MS' work has been really out to lunch for whatever reason of late, we'll suggest Bain, who actually converses regularly with exec mgmt teams, is the guy to listen carefully to...
"Fox expanded DreamWorks Animation’s How To Train Your Dragon 2 into 28 more markets in its 2nd frame after the animated sequel earned $24.4M in 25 markets last weekend. This frame’s take was a little under double that with $43.5M from 10,016 screens. Notably, in Brazil, where audience share for football matches on television has been sky high, HTTYD2 bowed as the 2nd biggest animated opening ever with $6.8M. Fox says that’s more than three times bigger than the original film and 10% over Despicable Me 2. In Mexico, another big World Cup country, HTTYD2 kicked off at No. 1 with $7.28M from 2,437 screens. In all, the Dean DeBlois-directed sequel took No. 1s in more than 30 markets and now has an international cume of $77.2M. It still has the majority of top European markets to come."
China's PMI was back above 50 last month -- first positive reading and best number in 6 months... and that was despite the last week in May as tourism was sharply curtailed for Tianamen Square remembrances at home.
China June HSBC flash PMI shows first expansion in six months as orders surge
Activity in China's factory sector expanded in June for the first time in six months as new orders surged, a preliminary HSBC survey showed on Monday, offering new signs the economy is stabilizing thanks to Beijing's measures to shore up growth...
It was the first time since December that the PMI was in growth territory, and the highest reading since November, when it was also 50.8.
The upbeat report reinforced market expectations that the world's second-largest economy is powering through its recent soft patch, even if the recovery may be patchy.
"This month's improvement is consistent with data suggesting that the authorities' mini-stimulus is filtering through to the real economy," said Qu Hongbin, chief economist for China at HSBC, referring to a series of measures announced by the government in recent months to spur activity. "We expect policymakers to continue their current path of accommodative policy stance until the recovery is sustained,” he added.
The preliminary factory reading for June indicates sequential growth could pick up to 1.8 percent in the second quarter from 1.4 percent in the first, Ting Lu, an economist at Bank of America-Merrill Lynch, said in a note to clients. "We expect Beijing to continue rolling out more measures to stabilize growth," Lu added.
The sub-index for new orders, a proxy to measure domestic and foreign demand, rose to 51.8, the fastest pace in 15 months.Much of the increase appeared due to stronger domestic consumption, as growth in new export orders slowed sharply.
Still, the survey showed an across-the-board improvement in the vast factory sector, with most of the 11 sub-indices... accelerating...
Steve Wynn said he was "highly confident" he would get 500 tables for the WYNN Palace... when pressed for details, he repeated his comment. To our sensibilities, that is a bit brash for Asian politics, a rough contrast to Ho's self-described "Asian way" of getting things done -- quietly, self-assuredly and certainly. The company's SEC filing makes it apparent they are building out MSC as a fully integrated resort, with casino, entertainment, theaters and all...
The references to the follow on "expansion phase" of MSC coming later is mentioned in two areas including the one above. The refrain is that they are just now getting going on plans and conceptualizing what they will do there on the next leg of MSC. Except for the increased estimated capex levels (again, almost triple the first phase opening next year), there is little else to know so far, but it seems some form of grand entertainment add-ons and a bigger IR buildout, likely with a lot more rooms we'll guess, is the stepped up even further program coming.
Noted prior, but it is still very early early early days for MPEL longs. This bs noise of late has given everyone doing the work to know the story a brilliant chance to add shares at cheap levels vs what is coming for ebitda and relative to peers and the broader market. We love the story AND the stock, have added another 10% to holdings since the sharp reversal off the bottom retest (almost 13% so far) and are very pleased to see PIMCO figure it out and now spreading the word ahead of the others even learning the difference between Crown Resorts, Melco and MPEL.
More on the "early days" comment: For the last three years, MPEL has grown adj ebitda better than 40%. Last yr they did that with no footprint expansion. With their dramatic progress on mass, model operating leverage, and huge footprint growth in percentage terms coming with COD Manila, MSC (Ph 1 AND 2) and Tower 5, this story and stock really are just getting going now.
Interesting to note here that their initial ballpark development cost for Phase 2 expansion of MSC is almost triple the cost of Phase 1 of Studio City (excluding land, cap i and predevelopment costs!). We think they will likely to begin the expansion phase as soon as MSC Phase 1 is done next year, such that it comes online after Tower 5 at COD Cotai is done in 2H 2016 and so likely done in 2017-18)...
"Our plan for the expansionary phase at Studio City is under review. Total project costs including construction and fit out costs, design and consultant fees and excluding the cost of land, capitalized interest and pre-opening expenses are currently budgeted at approximately US$2.04 billion. As of December 31, 2013, we had incurred capital expenditure of approximately US$580.1 million for the development of Studio City.
We successfully raised US$825.0 million through our Studio City Notes offering in November 2012.
We signed the Studio City Project Facility agreement in January 2013 with the lead arranging banks for a
HK$10,855,880,000 (approximately US$1.4 billion) senior secured credit facilities. These financings were
achieved without a corporate guarantee from MCE.
We will operate the gaming areas of Studio City pursuant to a services agreement we entered into in
May 2007 as amended on June 15, 2012 with, inter alia, Studio City Entertainment Limited (formerly known as
New Cotai Entertainment (Macau) Limited) (which we acquired control of 60% of the shares in July 2011),
together with other agreements or arrangements entered into between the parties from time to time, which may
amend, supplement or related to the aforementioned agreement. Our subsidiary Melco Crown Macau will be
reimbursed for the costs incurred in connection with its operation of the Studio City casino."