《MACAUGAMING：MACAUTOURTAKEAWAYSFOCUSONMARKETSEGMENTATION;BUYGALAXY1108.ppt》由会员分享，可在线阅读，更多相关《MACAUGAMING：MACAUTOURTAKEAWAYSFOCUSONMARKETSEGMENTATION;BUYGALAXY1108.ppt（12页珍藏版）》请在三一办公上搜索。
1、Jun2008,Nov2008,Feb2009,May2009,Nov2009,Feb2010,May2010,Nov2010,Feb2011,May2011,Nov2011,Feb2012,May2012,Nov2012,Aug2008,Aug2009,Aug2010,Aug2011,Aug2012,17.0,(X),15.0,11.0,7.0,5.0,November 7,2012Macau:GamingEquity ResearchMacau tour takeaways:focus on market segmentation;Buy GalaxySigns of VIP GGR st
2、abilization;companies guide mid-single to low-,teen%growth for 2013E,OUR KEY GAMING INDUSTRY ESTIMATES,We hosted an investor tour to Macau and invited a few gaming companiesto join our Greater China CEO conference last week.We came out from themeetings feeling more comfortable about the market outlo
3、ok and thedegree of competition.Much of the discussion was focused on their Cotai,No of devices at year-endVIP tables%YoYMass tables%YoYTotal tables%YoYSlots%YoY,20101,62927%3,162-9%4,7910%14,050-2%,20111,84213%3,4609%5,30211%16,05614%,2012E1,9234%3,5773%5,5004%18,82817%,2013E1,9401%3,7605%5,7004%18
4、,8280%,2014E1,9400%3,7600%5,7000%18,8280%,strategies and how each of them would strive to improve profitability,Revenue(US$m),before the next phase of project completions in 2015-17.We maintain our,VIP tables%YoY,16,95470%,24,45944%,26,7719%,30,25113%,34,18313%,above-consensus GGR growth forecast of
5、 16%yoy in 2013,mainlyattributed to our stronger VIP GGR assumption(+13%,vs.0-5%for,Mass tables&slot machines 6,586 8,947%YoY 34%36%Gross gaming revenue 23,540 33,406%YoY 58%42%Sources:DICJ,Goldman Sachs Research estimates,11,81432%38,58516%,14,56523%44,81616%,17,75422%51,93816%,consensus).We reiter
6、ate our CL-Buy on Galaxy.Aside from room for mass-,GLOBAL GAMING VALUATION COMPS,market table efficiency improvement,Galaxy would also benefit,should,Price,EV/EBITDA(X),the market turn incrementally more positive on VIP market,from which,TickerGalaxy Entertainment 0027.HK,RatingBuy*,6-Nov28.65,2012E
7、 2013E11.6 9.3,Galaxy generates 45%of its EBITDA.Key takeaways summarized below:,Sands ChinaMelco Crown-ADR,1928.HKMPEL,BuyBuy,31.2014.78,18.49.9,13.08.7,Signs of VIP GGR stabilization but too early to call for recovery yet:,Melco Crown-HKSJM HoldingsMGM China,6883.HK0880.HK2282.HK,BuyNeutralNeutral
8、,38.0017.7013.92,9.810.38.7,8.69.17.2,Most operators attribute the drastic slowdown since 4Q11 to weaker,Wynn Macau 1128.HKMarket cap weighted avg,Neutral,23.00,14.413.9,12.911.0,macro environment which affects mainlanders appetite to gamble.It istoo early to call for recovery yet,but most believe w
9、e are close to thebottom of the cycle and see signs of stabilization given no furtherdeterioration in debt collection.They generally guide mid-single digitto low-teen%yoy VIP GGR growth for Macau in 2013.In the medium,*On Conviction List In HKD,except that for MPEL,which is in USDSource:Bloomberg,Go
10、ldman Sachs Research estimates.GAMING SECTOR EV/EBITDA CHARTAverage EV/EBITDA=11.4X,term,a key challenge for market expansion is junkets ability to lookfor new players and cope with the sizeable agency network.,13.0,+1stdev,More emphasis on market segmentation:Though concurring that,9.0,1stdev,compe
11、tition in the premium mass segment is intensifying,mostoperators remain bullish about its growth potential and do not seem tobe overly concerned about table affordability amidst the rapid increase,in minimum bets.Over time,not every player can afford to gamble ontables,and some may shift to slots or
12、 electronic table games(ETG).Table quota unlikely to be awarded anytime soon:DICJ reiterated thegovernments stance that Macaus table growth will be capped at 3%per annum over the next 10 years,translating to 2,000 tables to beawarded by 2023.With 200 tables confirmed to be awarded to SCC,itwould lea
13、ve 1,800 tables to be shared among the remaining 5-6 Cotaiprojects implying 300-350 tables each.In assessing the number oftables to be awarded to individual projects,one of the keyconsiderations is the non-gaming component these projects offer themore they include,the more tables DICJ is likely to a
14、ward.,Source:Datastream,GoldmanSachsResearchRELATED RESEARCHMacau Gaming:EBITDA decelerates further in 3Q;GGR trend to stabilize in 4Q;Oct 24,2012,Simon Cheung,CFA+852-2978-6102 Goldman Sachs(Asia)L.L.C.Janet Lu+852-2978-1642 Goldman Sachs(Asia)L.L.C.The Goldman Sachs Group,Inc.,Goldman Sachs does a
15、nd seeks to do business withcompanies covered in its research reports.As a result,investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of this report.Investorsshould consider this report as only a single factor in makingtheir investment decision.Fo
16、r Reg AC certification and otherimportant disclosures,see the Disclosure Appendix,or go Analysts employed by non-US affiliates are not registered/qualified as research analystswith FINRA in the U.S.Global Investment Research,2,November 7,2012,Macau:Gaming,Macau tour and investor conference highlight
17、s(1)VIP-signs of stabilization but too early to call for sharp recoveryMost operators attribute the drastic VIP GGR slowdown since 4Q of last year to weakermacro environment which affect mainlanders appetite to gamble.According to them,while there has not been much reduction in the number of players
18、 coming to Macau,average bet size or spending per player has shrunk somewhat.Looking ahead,they arecautiously optimistic about the market outlook and expect mid-single digit to low teen%yoy VIP GGR growth in 2013.While it is too early to call for a strong recovery as yet,mostoperators believe it is
19、close to the bottom of the cycle and there are signs of stabilizationgiven no further deterioration in debt collection from the players and certain junketsstarting to turn less cautious regarding credit extension.By assuming steady debtcollection cycle and money velocity,we maintain our 13%VIP GGR g
20、rowth forecast fornext year,above consensus forecasts of 0-5%.,Exhibit 1:Macau monthly GGR,Exhibit 2:Macau monthly GGR yoy growth,(MOPmn)JanFebMarAprMayJunJulAugSepOctNovDec,20076,1785,9056,3246,3307,4775,7606,5296,6677,1459,2247,3598,124,200810,3389,36210,1239,1189,7939,9749,2869,6137,0888,8697,551
21、7,657,20098,5757,9129,5318,3408,7998,2699,57011,26810,94312,60012,21511,347,201013,93713,44513,56914,18617,07513,64216,31015,77315,30218,86917,35418,883,201118,57119,86320,08720,50724,30620,79224,21224,76921,24426,85123,05823,608,201225,04024,28624,98925,00326,07823,33424,57926,13623,86627,700,(YoY%
22、)JanFebMarAprMayJunJulAugSepOctNovDec,200771%33%35%40%67%43%42%41%55%56%49%34%,200867%59%60%44%31%73%42%44%-1%-4%3%-6%,2009-17%-15%-6%-9%-10%-17%3%17%54%42%62%48%,201063%70%42%70%94%65%70%40%40%50%42%66%,201133%48%48%45%42%52%48%57%39%42%33%25%,201235%22%24%22%7%12%2%6%12%3%,Full yr/Ytd,83,022 108,7
23、72 119,369 188,345 267,868 251,011,Full yr/Ytd,47,31%,10%,58%,42%,13%,Source:DICJ.,Source:DICJ.,Exhibit 3:We maintain our 13%VIP GGR growth forecast for next year,above consensus forecasts of 0-5%Our forecast of GGR,number of gaming tables and net win per table,2004,2005,2006,2007,2008,2009,2010,201
24、1,2012E,2013E,2014E,No of devices at year-end,VIP tables%YoYMass tables%YoYTotal tables%YoYSlots%YoY,26682%826239%1,092180%2,254177%,29912%1,08932%1,38827%3,42152%,56589%2,197102%2,76299%6,54691%,1,12499%3,25148%4,37558%13,267103%,1,063-5%2,954-9%4,017-8%11,856-11%,1,27920%3,49118%4,77019%14,36321%,
25、1,62927%3,162-9%4,7910%14,050-2%,1,84213%3,4609%5,30211%16,05614%,1,9234%3,5773%5,5004%18,82817%,1,9401%3,7605%5,7004%18,8280%,1,9400%3,7600%5,7000%18,8280%,Revenue(US$m),VIP tables%YoYMass tables&slot machines%YoYGross gaming revenue%YoY,3,72234%1,44979%5,17244%,3,603-3%2,14548%5,74811%,4,58427%2,4
26、7315%7,05723%,6,95052%3,39737%10,34747%,9,19432%4,36228%13,55631%,9,9508%4,92713%14,87710%,16,95470%6,58634%23,54058%,24,45944%8,94736%33,40642%,26,7719%11,81432%38,58516%,30,25113%14,56523%44,81616%,34,18313%17,75422%51,93816%,Net win per table per day(US$),VIP revenue per table per day%YoYMass tab
27、le revenue per table%YoYSlot revenue per slot%YoY,40,726-24%5,647-43%13613%,29,392-28%5,457-3%1424%,26,687-9%3,637-33%138-3%,24,257-9%2,967-18%122-12%,21,849-10%3,2309%15931%,18,517-15%3,5008%1739%,26,31442%4,53730%20619%,32,26323%6,22537%25021%,31,098-4%7,92727%2490%,34,93412%9,37318%29318%,39,3081
28、3%11,14719%35722%,Source:DICJ,Goldman Sachs Research estimates.Goldman Sachs Global Investment Research,3,November 7,2012,Macau:Gaming,Potential challenges to growing the VIP market in the medium termIn the medium term,our discussions with operators suggest some challenges in furtherdeveloping the V
29、IP gaming industry:VIP market more penetrated geographically:Since 2008,Macaus VIP GGR has almosttripled to US$27bn in 2012E,as junkets have been aggressively expanding their agencynetwork to look for more high rollers from inland provinces in China.Based on ourestimates,close to half of VIP players
30、 come from provinces outside of Guangdongprovince now,compared to merely 20%a few years ago.Our analysis suggests thatMacaus VIP market is not fully penetrated yet(for details,please refer to“Boom orbust?Stocks price in flat 2012 GGR;initiate on MGM China”,dated Oct 7,2011).Thissaid,it may be increm
31、entally more difficult to look for new agents and players as manyof the low hanging fruits may have already been picked.Junkets ability to cope with sizeable agency network:The junket market has alwaysbeen quite concentrated,with the top five operators(or its subsidiaries)capturingclose to 80%of the
32、 VIP market(Exhibit 4).Given the rapid growth in market size,eachjunket is now operating close to 500 gaming tables and dealing with over 20,000agents.This raises questions about their ability to cope with the sizeable agencynetwork on various issues,such as due-diligence,debt collection etc.While o
33、ur forecasts suggest potential upside to consensus estimates for VIP market in thenear term,we maintain a more constructive stance on the long-term growth potential ofthe mass market segment given the above issues.Exhibit 4:The junket market has always been quite concentrated,with the top five opera
34、tors(or its subsidiaries)capturing close to 80%of the VIP marketStructure of the Macau junket market,JunketMarket shareNo.of VIP tablesAvg monthly rolling chipturnover(HK$bn)No.of junket agentsCasinos,Neptunec.12-14%220c.65-7525,000Sands MacaoStarWorld,Golden Resorts13.5%n.a.c.65-70n.a.Casa RealGran
35、dview,Suncity10.5%221c.50-60n.a.City of DreamsFour Season,Jimei9.0%n.a.c.40-50n.a.AltiraCity of Dreams,David Group6.5%n.a.c.30-40n.a.City of DreamsFour Season,AERLc.2-3%29c.10-151,500Galaxy MacauStarWorld,A-Maxn.a.5n.a.n.a.GreekMythology,Doren.a.14n.a.n.a.The Venetian,The VenetianCity of DreamsFour
36、SeasonGalaxy Macau,SJM,Galaxy MacauGrand LisboaLArcLan Kwai Fong,Four SeasonJimeiMGM GrandSands Macao,Galaxy MacauLArcMGM GrandWynn,The Venetian,Grand LisboaLArcMGM GrandWynn,MGM GrandStarWorldThe VenetianWynn,The VenetianWynn,Sands Cotai CentralSource:Company data.(2)Market segmentation and premium
37、 mass market potentialThere has been much discussion about the premium-mass market segment,in whichcasino operators appear to have put more emphasis on.The premium mass playerstypically have the following characteristics:Gamble on cash,unlike VIP players,who play on credit and have accessibility tol
38、iquidity outside of China without having to rely on junkets.Younger entrepreneurs,most aged below 40,who got their wealth relatively quicklybenefiting from Chinas economic liberalization since the 1990s.Goldman Sachs Global Investment Research,4,November 7,2012,Macau:GamingSome of them do not want t
39、o be seen as being associated with junkets.Every operator segments the market differently.MGM,for example,has four-tieredmembership programs,including Supreme(HK$0.8mn annual loss),Platinum(HK$0.25mnannual loss),Elite(HK$0.1mn annual loss)and Gold(anything below).The first two tiersgenerated over 70
40、%of MGMs mass-market GGR last year.MPEL,on the other hand,segments the market by table minimum bets and areas in the casino hall.Premium massaccounts for roughly half of its mass-market GGR.Rationale for targeting premium mass market playersWe see two reasons why operators put more emphasis on marke
41、t segmentation and targetthe premium mass market:(1)casino operators need to better serve the players whobecome more sophisticated as the gaming market grows;(2)with the implementation oftable cap,some operators,particularly those who do not yet have Cotai projects,may facecapacity constraints.Durin
42、g the busier hours when the tables are fully occupied,they haveno choice but to adjust the minimum bet sizes to improve table efficiency and yield.SJM,for example,mentioned that their target is to maintain 42 hands or games per hour at theirtables.Operators whom we met concur that the competition in
43、 this segment is intensifying,although they remain optimistic about its growth potential,given the emergence of middle-class and the growing portion of income they are willing to allocate to leisure or otherdiscretionary spending.They do not seem to be overly concerned about the issue of tableafford
44、ability and agree that overtime not every player can afford to gamble on tables,andsome would have to shift to slot or electronic table games(ETG).As far as profitability isconcerned,MGM indicates that the average yield per premium mass table is 2.2 times thatof its VIP table.With premium mass table
45、s EBITDA margin 4-5x that of VIP(i.e.,45-50%,vs.10-15%),we estimate that MGMs daily net win per premium mass table is roughly half ofVIPs and double of middle-mass tables(Exhibit 5).Exhibit 5:We estimate that MGMs daily net win per premium mass table is roughly halfof VIPs and double of middle-mass
46、tablesVIP,premium mass and general mass tables profitability(3Q12),VIP,Premium mass,Overall mass,Net win per table per day(US$)*EBITDA per table per day(US$)EBITDA margin,33,1703,31710%,16,2167,29745%,10,1914,07640%,*Indicates MGM actual net win per table in 3Q12 for VIP and overall massSource:Compa
47、ny data,Goldman Sachs Research estimates.(3)Regulatory and Cotai project updatesAs most operators have been awarded the land concession for their projects recently,investors expressed interest in the latest construction progress and the governmentsstance toward awarding table quotas to individual op
48、erators.Piling work for Studio City and Galaxy Macau 2 to be completed by year-endGalaxy said that the construction of Galaxy Macau Phase 2 is on track with around 700workers on site now targeted to complete the piling work by year-end(Exhibit 6).We havealso taken a photo of MPELs Macau Studio City
49、site from City of Dream(Exhibit 7)whichshows that construction is in progress.Both companies target to complete the projects bymid to end-2015.In response to questions as to whether there are sufficient workers tocomplete all the Cotai casino and other infrastructure projects on time,most operatorsG
50、oldman Sachs Global Investment Research,5,November 7,2012,Macau:Gamingbelieve the government would likely relax the existing foreign labor policy which onlyallows companies to hire one foreign worker for each local worker they hire.As for theother Cotai projects,MGM and SJM said that they are close
