Another big Q for a Macau operator.  Galaxy Macau on schedule


“The third quarter was another record quarter for GEG, outperforming the market with outstanding gaming growth and strong results from all of our businesses. Our absolute focus on “World Class, Asian Heart” service and meeting the particular needs and tastes of Asian customers has enabled StarWorld to continue to lead the market. The Macau market continues to grow very rapidly and infrastructure projects in China and Macau are expected to maintain this growth and attract a new type of visitor to Macau, who will stay longer and, as well as gaming, look to enjoy entertainment and leisure facilities. The accelerated roll-out schedule of Galaxy Macau™ will enable the Group to fully capture this surging demand. Galaxy Macau™ remains on budget and on schedule to open in early 2011, a time at which we see an exceptional window of opportunity to introduce a large and truly Asian destination resort to the rapidly growing Macau market. The fit out of the property and recruitment of property staff signals the project’s transition from the construction phase to the exciting preopening of the property.”


-Dr. Lui Che Woo, Chairman of Galaxy Entertainment Group




  • Galaxy Entertainment Group reported record EBITDA up 115% YoY to HK$616MM; StarWorld reported record EBITDA up 161% YoY to HK$568MM - 9th consecutive Q of growth
  • StarWorld VIP win% in 3Q was 3.1%,compared favorably to 2.3% in the third quarter of 2009
  • StarWorld EBITDA margin of 21%, lower than the 23% in Q2
  • StarWorld RC Volume rose 69% YoY to HK$137BN; VIP Revs up 129% YoY; Mass Revs up 35% YoY; Slot Revs up 67% YoY
  • "Galaxy Macau™ is the only new resort destination set to open in Macau until at least the end
    of 2011"
    • Accelerated opening with 1,400 rooms
  • $1.9BN Cash on Hand; total debt increased from $3.4BN to $4.8BN QoQ 



  • Mass volume $1.8BN, up 20% YoY
  • City Club EBITDA $43MM beat company projection of  $20-25 EBITDA per quarter
  • Galaxy Macau will have 50 F&B outlets
  • Thru Sept 30, have invested a little over $7BN in Galaxy Macau


  • October trends: should be record month for Macau market; StarWorld held very poorly
  • StarWorld EBITDA margin declined in Q3 due to different mix of business in VIP (rev share/RC share arrangements)
  • Have completed recruitment of Galaxy Macau mgmt team
  • Have not started the hiring of mass workers
  • Galaxy Macau marketing plans: launched newsletter and expanded awareness through social media outlets; advertising program and travel agency programs doing well in Guangdong province
  • Galaxy Macau
    • VIP/Mass table mix: 2/3 mass, 1/3 VIP
  • Capex invested: $1.6 BN in Q3; remaining capex for Galaxy Macau: bulk will be in 1Q/2Q 2011
  • Departure of Galaxy Macau executives: don't worry

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more

Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

read more

An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

read more

A 'Toxic Cocktail' Brewing for A Best Idea Short

The first quarter earnings pre-announcement today is not the end of the story for Mednax (MD). Rising labor costs and slowing volume is a toxic cocktail...

read more

Energy Stocks: Time to Buy? Here's What You Need to Know

If you're heavily-invested in Energy stocks it's been a heck of a year. Energy is the worst-performing sector in the S&P 500 year-to-date and value investors are now hunting for bargains in the oil patch. Before you buy, here's what you need to know.

read more

McCullough: ‘My 1-Minute Summary of My Institutional Meetings in NYC Yesterday’

What are even some of the smartest investors in the world missing right now?

read more

Cartoon of the Day: Political Portfolio Positioning

Leave your politics out of your portfolio.

read more

Jim Rickards Answers the Hedgeye 21

Bestselling author Jim Rickards says if he could be any animal he’d be a T-Rex. He also loves bonds and hates equities. Check out all of his answers to the Hedgeye 21.

read more

Amazon's New 'Big Idea': Ignore It At Your Own Peril

"We all see another ‘big idea’ out of Amazon (or the press making one up) just about every day," writes Retail Sector Head Brian McGough. "But whatever you do, DON’T ignore this one!"

read more