LEISURE LETTER (01/09/2015)

Tickers:  LVS, GALAXY


Galaxy– The Macau government will not issue a suspension of construction order at a yet-to-be completed 36-story building at Galaxy Macau Phase 2, following a fire that partially destroyed the base of one of its ornamental cupolas.

Article HERE

Takeaway: We believe Ph2 is still on target for May holiday opening.


LVS– MBS sues chairman of For You Group for S$3.9 million over debts in HK.  “Mr Chen confirms that the action is his personal matter; the shares of one of his private companies are the subject assets of the charging order; and the matter can be resolved the soonest. The board considers that the action and all the orders are personal matters of Mr Chen. Besides, the company confirms that it had no involvement in the matters,” said For You, which changed its name from China Packaging Group last November.

Article HERE

Takeaway:  MBS has struggled with its VIP business with volumes falling 29% YTD.  LVS appears to be adequately reserved. 


Niraku – Japanese pachinko company Niraku GC Holdings is seeking a HK listing in 1H 2015. The company hopes to raise about $75 million. If successful, Niraku would become the second pachinko company to list in the city. Dynam Japan Holdings raised $202 million in August 2012. 

Article HERE


Pagcor – reported a 6% increase in collections from P12.07bn (Jan-Nov 2013) to P12.8 billion for the same period in 2014. Charisse Chuidian, who heads the public relations team handling the three-hotel complex in the City of Dreams, whose soft opening last Dec. 14 was anything but soft. “Such a big crowd, to think that we didn’t  publicize it, no fanfare at all!” Charisse gushed.

Article HERE

Takeaway:  Philippines GGR growth recently have been outperforming. This bodes well for the grand opening of CoD Manila.


Paradise– casino revenues rose 3.8% in 2014 to KRW591.3 billion (US$541.6 million). Table revenue grew 3.5% to KRW 558.7 bn YoY. Slot revenue jumped 10.4% to KRW 32.6 bn.  Table drop gained 12.7% YoY in 2014 to KRW 5.3 trillion.

Article HERE

Takeaway: Modest sales growth for Paradise in 2014. 


TUI–  assumes ownership of EUROPA 2 for 280m euros.  The transaction will replace the previous charter agreement of the ship which was newly commissioned in 2013. The transaction consists of a cash component of around 67 million euros payable to the previous owner and the assumption of 211 million euros of debt.


Lionel Leong – Macau’s Secretary for Economy and Finance Lionel Leong Vai Tac said GGR was unlikely to return to YoY expansion until 2H 2015. Leong said the GGR decline was “positive” as it could give the industry breathing room to promote a more sustainable development model for the long run.

Article HERE

Takeaway: Echos similar comments made by Macau govt leaders 


Hedgeye Macro Team remains negative Europe, their bottom-up, qualitative analysis (Growth/Inflation/Policy framework) indicates that the Eurozone is setting up to enter the ugly Quad4 in Q4 (equating to growth decelerates and inflation decelerates) = Europe Slowing.

Takeaway:  European pricing has been a tailwind for CCL and RCL but a negative pivot here looks increasingly likely in 2015. 

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