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While France beat Croatia 4-2 in the final, the 2018 World Cup is officially over. No matter who wins or loses, the biggest winner is probably not the team but the gaming companies. According to statistics from the Independent Gaming Arbitration Commission (IBAS) in the UK, before 2002 World Cup semi-final With nearly $ 20 billion, the total number of bets on the World Cup has increased from about 10 times to over $ 220 billion over the past year (2014), regardless of the size of the outside. For casino operators, it will inevitably have a dilutive effect, and Macau's gambling revenues are the first to bear the brunt.
The Office of Inspection and Coordination of the Macau Games announced the latest data: the game business figure in June was 22.49 billion patacas, up 12, 5% compared to the same period last year. The increase was lower than the market forecast of 18%, which was 11.8% lower than in May. The Moto research report pointed out that, due to the impact of the World Cup, the demand for games has slowed significantly in late June, down from about 20% to 30% over to the previous half. However, the bank pointed out that although gaming revenue was "out of shape" last month, there was no change in the basic factors of gaming stock.
Noteworthy "In recent years, the summer vacation season has often brought positive support to gambling revenue [figure 2]. In 2016 and 2017, gambling revenues in July and August recorded double-digit growth from June, and in August 2016, they increased strongly by 18.6%. Deutsche Bank estimates that the impact of this year's World Cup is more moderate than in 2014, and previous data show that revenue from the game will rebound significantly after the quarter-finals. This shows that revenue from the games in July and next month have a good chance of bouncing back.
In addition, the Hong Kong-Zhuhai-Macau Bridge will soon be open, the national holidays and the Christmas holidays in the second half, which will help attract tourists to Australia. This sector is less likely to be involved in the trade war, and it is worth noting under the market turmoil.
Galaxy (00027), the industry leader, achieved satisfactory results last year: Benefiting from the growth of mid-range and mid-range high-end, the Group's annual business turnover up 18% to 62.5 billion yuan adjusted by EBITDA. 14.1 billion yuan, an increase of 37% over 2016, a record, profit attributable to shareholders was 67% to 10.5 billion yuan.
The Group also had a positive start of the year of 18.5 billion yuan, up 32% year-on-year, adjusted EBITDA 36%, reaching a record high of 4 , 3 billion yuan. The Group's balance sheet is very healthy, with 41.8 billion yuan of cash and mobile and net cash of 34.5 billion yuan, making it one of the strongest among operators of global games.
As mid-market activities are more profitable than VIP room activities, GE Entertainment has also been steadily increasing its share of revenues in recent years. The largest contribution to Macau Galaxy, the business game mbad turnover rose from 26.2% in 2013 to 37.4% in 2017. Last year, the mid-range, the machines Slot and non-gaming accounted for about 50% of the overall business figure. The increase in GEG's share of mid-field revenue is increasing every year, which is considered a major reason for the increase in GEG's earnings. With respect to EJFQ FA + data, the company's projected C / B ratio is about 19.1 times higher than the median level [Figure 3] and the valuation is reasonable: if it can cross and stabilize the top of the area (69.5 yuan), I believe. Then return to the rising waves.
Sand Dividends Attract
Sands China (01928), which is a giant with GEG, is another option, with a market share of about 30%, or nearly 20% more than the second. The entertainment is high. In 2017, taking advantage of the first annual results of Macao Paris, EBITDA grew by 16.4% year on year to 2.61 billion US dollars and net profit reached 1.6 billion US dollars, or an increase of 31% over 2016.
The Group stated that revenues from mid-term games of chance increased by 19% over the period, mainly due to the support of the hotel industry. , shopping experience and entertainment programs. Due to the good performance of the balance sheet and cash flows, the dividend per share for 2017 was $ 1.99 Hong Kong (net and distribution) and the total amount of cash repaid to shareholders increased to 16 billion yuan, the dividend reaching 4.8%. Play Inventory.
According to EJFQ FA + data, the company predicts a ratio of about 18.1 times, about 1.1 standard deviations below the median level [Figure 4]and the valuation is low, the main resistance Sands China's short term being dense. At the bottom of the area and close to 50 antennas, about 44.5 yuan, investors can use it as a short-term rebound goal.
Letters Investment Research Department
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