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TICKERS: SJM, LVS, IGT, RCL


 EVENTS

  • Feb 25: 
    • Prestige analyst day (9:00am-12pm)
    • ISLE F3Q 2015:
  • Feb 26: RHP 4Q CC 10:00am  pw: 73087325

COMPANY NEWS

SJM - Legislative Assembly member Ella Lei Cheng I has asked the government to look again at the gaming tax relief that SJM gets for dredging the harbor. Ms Lei says in a written inquiry that the government should reconsider the arrangement when it gets round to reviewing the gaming concessions. The rate of gaming tax SJM pays is one percentage point less than what the other concessionaires pay.

ARTICLE HERE

LVS -  Sands China announced what it describes as an “exclusive partnership” with a major non-gaming resort on neighboring Hengqin Island in mainland China, to offer two-center holiday packages.

The arrangement with Hengqin Chimelong International Ocean Resort – a few minutes drive from Sands China’s Cotai Strip properties via the Lotus Bridge immigration checkpoint – is to be marketed by Sands China as the ‘Macao Hengqin Experience Package’.

ARTICLE HERE

Ainsworth - The company said revenue gains in the Americas “assisted in increasing the contribution of revenue from international markets which now represent 52 percent of total revenue compared to 33 percent in [the] previous corresponding period”. Revenue in Australia dropped 34% YoY to AUD53.5 million, while that of the international segment went up by 45% to AUD58.4 million. The company grew its installed base of recurring revenue machines in the US by 48% to 2,286.

Takeaway: Ainsworth is making headway in the US slot market.

IGT - has been chosen to provide its Advantage 9.2 System Suite with Service Window, in addition to 80 IGT games at the new Three Rivers Casino Coos Bay, slated to open in April 2015 in Coos Bay, Oregon.

RCL - Citing foggy conditions that have delayed Brilliance of the Seas' previous cruise and are forecast to continue for the next few days, RCL canceled the Feb. 23 sailing. RCL will provide a full refund of the cruise fare plus a future cruise certificate for 25% of the fare paid for the Feb. 23 voyage.  

Takeaway:  RCL has been busy dealing with ship-specific incidents this year.

Viking - Viking Cruises, currently with 60 vessels across Europe, Russia and Asia, plans to begin sailing on the Mississippi in late 2017. Plans call for the construction of six vessels over the next three years at an estimated cost of $90m to $100m per vessel, all to be built in US shipyards and crewed by US citizens. The vessels will be owned by Tennenbaum Capital Partners, a Los Angeles-based alternative investment management firm, and time-chartered to Viking in compliance with maritime laws.

ARTICLE HERE

INDUSTRY NEWS

Arizona - The Tohono O’odham Indians are building a temporary casino as the first phase of their $400 million casino in Glendale, west of Phoenix, the Phoenix Business Journal reported. The temporary casino will have 1,089 slot machines and should be open by the fourth quarter. 

Article HERE

Takeaway: After much controversy, it looks like this property is finally on its way

MACRO

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.