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Tickers: LVS, HLT

EVENTS

  • July 29: 
    • WYNN 2Q 8:30am ; pw: 67663320
    • NCLH 2Q 11am ; pw: 63063248
    • IGT 2Q release
    • GLPI 2Q call 10am
  • July 30: 
    • MGAM 2Q earnings
    • MAR 2Q call 10am : , pw: 59383825
  • July 31:
    • HST 2Q call 10am:
    • BEL (OEH) 2Q call 10am: , pw: 68627603
    • H 2Q call 11:30am:  , pw: 21721745.
    • BYD 2Q call 5pm:  , Passcode: 2654057
  • Aug 1:
    • HLT 2Q 10am: , pw: 67361605

COMPANY NEWS

BTH:SP – According to Vietnamemet, which quoted Vietnam Investment Review, Banyan Tree Holdings Ltd will be be granted a casino licence for Laguna Lăng Cô beach resort on the central coast of Vietnam. 

Takeaway: More regional-type casinos across Asia.

LVS & 1928:HK – Macau labor group Forefront of the Macao Gaming is demanding a meeting with officials from Sands China Ltd to discuss the company’s policies on pay and promotion of casino floor workers. The group’s President Leong Man Teng indicated if officials from Sands China Ltd do not meet with the labor group by Friday, August 1, the group may organize a new protest or even a strike on August 28, the anniversary of the opening of casino resort Venetian Macao, Sands China’s flagship property.

Takeaway: Increasing labor tensions just as worker recruiting is about to begin for the new property openings.

1159:HK – (Sinogreen Energy International Group Ltd) Jack Lam Yin Lok, a veteran of the Macau VIP business (Jimei Group Ltd) and British Virgin Islands entities called Creative Cosmo Ltd and New Elect International Ltd acquired 325 million new shares in Sinogreen for a total amount of HKD113.8 million (US$14.7 million). With the investment, Sinogreen diversifies its operations awhile Jimei Group essentially secures access and an indirect listing on the HKSE.  Jimei Group currently operates Jimei Casino near the Grand Lapa hotel on Macau peninsula, as well as junket rooms in seven other Macau properties including Wynn Macau, Sands Macao and City of Dreams, as well as Fontana Leisure Parks & Casino at Clark Special Economic Zone in the Philippines.

Takeaway: New capital sources for the junkets?

6889:HK Dynam Japan – said total revenue for the quarter ended June 30 decreased by approximately 4.8% year-over-year to JPY38.2 billion (US$375 million) due to an 8.3% year-over-year decline, to JPY213 billion, in total gross coin-in.  The company indicated the reductions were due to the Japanese sales tax increase from 5% to 8% in April.  Dynam Japan Holdings is a financial supporter of Macau Legend Development (1680:HK) due to its US$85 million investment in Macau Legend. 

Takeaway: Japan sales tax hits local gaming.

GENS:SP – Genting Singapore and Landing International (582:HK) announced in June a partnership to build a US$2.2 billion casino resort in Jeju, modeled after Resorts World Sentosa in Singapore and will be called Resorts World Jeju. Previously Landing International Development Ltd said it would use about HK$320 million (US$41.3 million) of the HK$600 million proceeds from a share offering for investment in Resorts World Jeju. Earlier today, Landing International said another HKD125 million will be used for the casino business. Construction of Resorts World Jeju is expected to start in the third quarter of 2014

Takeaway: More details on Resorts World Jeju.

HLT – announced "China Summer Getaway" promotion for Mainland China and Hong Kong. The promotion will reward customers who book directly through Hilton Worldwide's portfolio of hotels in Mainland China and Hong Kong with exclusive discounts as well as, offering HHonors membership points to our valuable members. Hilton Worldwide Announces “Summer Getaway” Promotion for Mainland China and Hong Kong From today to August 29, 2014, all fully prepaid direct bookings up to two days prior to arrival will enjoy up to 34% off at any participating hotels and resorts under Hilton Worldwide across Mainland China andHong Kong.

Takeaway: Interesting as recent commentary indicated China was a strong market, we look forward to commentary on the earnings call about this promotion.

INDUSTRY NEWS

Singapore/Malaysia Vehicle Tolls – According to the Land Transport Authority, Singapore will match any new or increased toll charges by Malaysia on vehicles entering Johor. Currently, vehicles from Singapore entering Johor via the Causeway in Woodlands pay RM2.90 ($1.10). This would be increased to RM9.70 ($3.80), a more than three-fold increase. In addition, Malaysia also intends to impose a new RM6.80 ($2.70) charge on vehicles exiting the checkpoint back towards Singapore. This means a Singapore vehicle going for a day-trip into Johor would have to pay a total of RM16.50 ($6.45) for a round trip. Buses will be charged RM13.30 for a round-trip while taxis will be charged RM8.20 ($3.20). The new charges are supposed to kick in this Friday, 1 August. All of this comes on top of a proposed new Vehicle Entry Permit (VEP) from both countries. Malaysia is proposing a VEP fee of RM50 (S$19.50) for all Singapore-registered vehicles entering Johor. This after Singapore's LTA said it is raising its VEP on foreign vehicles entering the Republic from S$20 to S$35 for a daily permit, starting this Friday

Takeaway: Bad news for the Singapore mass segment business at RWS and MBS. 

Las Vegas Residential Real Estate – After a brief lull, lenders are again ramping up pressure on delinquent Las Vegas homeowners. The number of default notices filed in Clark County has climbed every month this year, from 194 in January to 735 in July as of Thursday. 

Takeaway: A headwind for the locals.  We recently wrote about this emerging headwind on July 16th "LV Locals: The Mirage of a Recovery"

MACRO

Hedgeye remains negative on consumer spending and believes in more inflation.  Following  a great call on rising housing prices, the Hedgeye

Macro/Financials team is turning decidedly less positive. 

Takeaway:  We’ve found housing prices to be the single most significant factor in driving gaming revenues over the past 20 years in virtually all gaming markets across the US.