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SINGAPORE Q3 REVIEW

Singapore casino gaming market rebounded in Q3, as gross gaming revenues rose 29% YoY and 15% sequentially.  For comparison, Macau GGR grew 7% QoQ and 48% YoY.  S’pore gaming EBITDA grew 3% QoQ to S$882MM, 2% lower than Q1’s high of S$902MM.  Mass revenues grew 10% to S$640MM and VIP Rolling Chip Volume expanded 16% to S$36.8BN, a new record.  

 

3Q hold was 2.9%, slightly higher than Q2’s 2.82%.  Average hold in for the 2 IR’s since 1Q10 has been close to 3%.  Sequential revenue growth has been falling since 3Q 2010.

 

SINGAPORE Q3 REVIEW - spore1

 

It took MBS only 6 quarters to lead in every market share category in Q3.  The biggest shift was in VIP RC Volume share where MBS surged from 48% in Q2 to 56% in Q3.  Despite having a hold % that was 0.5% points lower, MBS extended its VIP win market share to 51.6%.  While Genting’s bleeding may continue, its slot ramp towards the end of the year may help build mass share in Q4. 

 

Singapore’s Q3 strength is a relief for the bulls as weak Q2 results had dampened optimism.  However, as GENT pointed out in their Q3 conference call, caution is warranted at least for the rest of the year.  We still see a cap on long-term growth in Singapore unless junkets are approved in the near future.

 

SINGAPORE Q3 REVIEW - spore2

 

SINGAPORE Q3 REVIEW - spore3

 

SINGAPORE Q3 REVIEW - spore4

 

SINGAPORE Q3 REVIEW - spore5

 

SINGAPORE Q3 REVIEW - spore6


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 On the call will be:

    

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·         Daryl Jones, Macro

·         Brian McGough, Retail

·         Todd Jordan, Gaming, Lodging and Leisure

·         Howard Penney, Restaurants

·         Tom Tobin, Healthcare

·         Josh Steiner, Financials

  

ABOUT HEDGEYE

Hedgeye Risk Management is a leading independent provider of real-time investment research. Focused exclusively on generating and delivering actionable investment ideas, the firm combines quantitative, bottom-up and macro analysis with an emphasis on timing. The Hedgeye team features some of the world's most regarded research analysts - united around a vision of independent, uncompromised real-time investment research as a service. For a complete listing of our sector head bios, please click here: https://www2.hedgeye.com/pages/team

 

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DIAL IN & MATERIALS: HEDGEYE'S BEST IDEAS. PERIOD.

Valued Client,
 
5-10 minutes prior to the 11AM EDT start time please dial:

(Toll Free) or (Direct)
Conference Code: 198252#
  

Materials: "BEST IDEAS. PERIOD."

                 
To submit questions for the Q&A, please email .

****************************************************************************** 
 

 

"BEST IDEAS. PERIOD." 

   

We invite you to join us TODAY, Friday, November 11th, for our first-annual Best Ideas call. We will be outlining the top investment ideas, both long and short, across each vertical of our world-class research team. In aggregate, we will offer more than ten unique and differentiated investment ideas for the intermediate term.

 

 On the call will be:

    

·         Keith McCullough, CEO

·         Daryl Jones, Macro

·         Brian McGough, Retail

·         Todd Jordan, Gaming, Lodging and Leisure

·         Howard Penney, Restaurants

·         Tom Tobin, Healthcare

·         Josh Steiner, Financials

  

ABOUT HEDGEYE

Hedgeye Risk Management is a leading independent provider of real-time investment research. Focused exclusively on generating and delivering actionable investment ideas, the firm combines quantitative, bottom-up and macro analysis with an emphasis on timing. The Hedgeye team features some of the world's most regarded research analysts - united around a vision of independent, uncompromised real-time investment research as a service. For a complete listing of our sector head bios, please click here: https://www2.hedgeye.com/pages/team

 

Please contact if you have any questions.  

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The Hedgeye Sales Team

 
HEDGEYE RISK MANAGEMENT                                                       
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www.hedgeye.com
 
 


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DIAL IN & MATERIALS: HEDGEYE'S BEST IDEAS. PERIOD.

CALL TODAY, NOVEMBER 11th, 2011, 11AM EDT

 

Valued Client,
 
5-10 minutes prior to the 11AM EDT start time please dial:

(Toll Free) or (Direct)
Conference Code: 198252#
  

Materials: "BEST IDEAS. PERIOD."

                 
To submit questions for the Q&A, please email .

****************************************************************************** 
   

"BEST IDEAS. PERIOD." 

   

We invite you to join us TODAY, Friday, November 11th, for our first-annual Best Ideas call. We will be outlining the top investment ideas, both long and short, across each vertical of our world-class research team. In aggregate, we will offer more than ten unique and differentiated investment ideas for the intermediate term.

 

 On the call will be:

    

·         Keith McCullough, CEO

·         Daryl Jones, Macro

·         Brian McGough, Retail

·         Todd Jordan, Gaming, Lodging and Leisure

·         Howard Penney, Restaurants

·         Tom Tobin, Healthcare

·         Josh Steiner, Financials

  

ABOUT HEDGEYE

Hedgeye Risk Management is a leading independent provider of real-time investment research. Focused exclusively on generating and delivering actionable investment ideas, the firm combines quantitative, bottom-up and macro analysis with an emphasis on timing. The Hedgeye team features some of the world's most regarded research analysts - united around a vision of independent, uncompromised real-time investment research as a service. For a complete listing of our sector head bios, please click here: https://www2.hedgeye.com/pages/team

 

Please contact if you have any questions.  

Regards,

 

The Hedgeye Macro Team


THE M3: COTAIJET; CHINA OCTOBER BANK LOANS

The Macau Metro Monitor, November 11, 2011

 

 

COTAIJET WELCOMES TAIPA COMPETITION Macau Daily Times

“We see little impact to CotaiJet,” the company’s COO, John Seale said.  “In fact, we will see increased competition because if the relocation or shut down does occur, other ferry service operators will also be moving to Taipa,” he added.

 

Seale believes changes to the ferry terminal situation will not harm Sands China. “We do not see any impact on our business in general,” he said.  Seale is also unconcerned for Sands Macao casino, located near the Outer Harbour Ferry Terminal. “Sands has been in the market for over seven years and has a very established customer base,” he emphasized.

 

“Our view is neutral,” said John Seale. However, Sands’ non-executive director Michael Leven said last month the company would “still like the [Outer Harbour] terminal to stay open as long as possible”.

 

IN SIGN OF EASING, CHINA OCTOBER BANK LOANS REBOUND Reuters

Chinese banks lent 587 BN yuan ($92.5 BN) of new loans in October, +25% MoM and flat YoY, evidence of "selected" policy easing by the government to support growth as inflation falls.  China's M2 money supply eased to 12.9% from 13.0% in September.  The median forecast by economists was for an issuance of 500 billion yuan in October and a 13.0% rise in M2 last month.


THE HBM: SBUX, MCD, COSI, WEN, BOBE

THE HEDGEYE BREAKFAST MONITOR

 

MACRO NOTES

 

University of Michigan Consumer Confidence comes out today at 09:55 a.m.  We’ll be watching for any indication of a further slump in confidence although, at least for the restaurant space, confidence hasn’t seemed to matter lately although it may begin to matter if it slumps much lower.

 

THE HBM: SBUX, MCD, COSI, WEN, BOBE - umich survey vs actual

 

 

SUBSECTOR PERFORMANCE

 

THE HBM: SBUX, MCD, COSI, WEN, BOBE - subsector fbr

 

 

QUICK SERVICE

 

SBUX: Starbucks announced the acquisition of juice company Evolution Fresh for $30 million in cash.  The company hopes that the purchase will help Starbucks gain a foothold in the estimated $50 billion health food market.  We believe that the company's strategy is to capture the upside in profits by owning these small brands in tangent categories.  Starbucks' distribution channel provides a clear runway for these brands to grow rapidly.

 

SBUX: Starbucks is targeting 20% of customers in Malaysia to use the newly-launched pre-loaded Starbucks card.  A spokesman for the company said that the card is a stored value card that offered customers convenience when purchasing merchandise at any Starbucks store nationwide.

 

MCD: McDonald’s is looking to capitalize on the depressed commercial property market and purchase more of the land and buildings where it operates, according to management commentary during an investor conference yesterday. 

 

COSI: Cosi issued a letter to Brad Blum yesterday saying it would welcome his offer to lead the company for $1 if it were “sincere”.

 

WEN: Wendy’s was maintained “Overweight” at Barclays.

 

 

CASUAL DINING

 

BOBE: Bob Evans Farms was downgraded to Equal Weight from Overweight at Stephens.

 

THE HBM: SBUX, MCD, COSI, WEN, BOBE - stocks 1111

 

 

 

Howard Penney

Managing Director

 

Rory Green

Analyst


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