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Takeaway: 4Q EBITDA missed expectations due to higher costs and revenue mix. Jan/Feb performing better than market.


  • Visitation from Mainland has continued to grow
    • High end players have either less gaming budget or visiting less often
  • Do not expect V-shaped recovery in near-term
  • 2015 Wage increase: 5% across the board and some loyalty benefits
  • 5% of rooms will be out of service in the next couple of years
  • On schedule to open Lisboa Palace in 2017. Currently 600 workers there
  • 2015 capex:  $7.1bn ($5.8bn -construction for Lisboa Palace); will be funded from cash
  • Will consider financial options after completion of Lisboa Palace

Q & A

  • Staff retention:  3,600 subscribe to bonus accumulation program.  Will be $45m/ year
  • Dividend payout: 70% in-line with what they have said before
  • New Mainland China visitation restriction possibility: both HK and Macau concerned. May address it in upcoming CPCC meeting.  Impact may be minimal.
  • Grand Lisboa margins:  low because of revenue mix and statutory holiday payments
  • Why satellite RC volume up?  Solid junket operators 
  • Casino Lisboa:  hold rate - 3.26% in 4Q, up from 2.77% in 3Q
  • Jan market share: improvement in both vip and mass
  • Promotional $ as a % of revenue:  5.9%...want to keep in the 4-5%; have to reinvest in mass business
  • February CNY:  market fundamentals remain weak but SJM doing better than market