LEISURE LETTER (11/2/2015) - WYNN, 0296.HK, UBER



November 3: 10:00AM: NCLH 3Q CC 

November 3: 10:00AM: RHP 3Q CC  

November 3: 10:00AM: H 3Q CC - , PW: 52469697

Novmber 4: 4:30PM: AWAY 3Q CC - ,PW: N/A

November 4-6: Anthem of the Seas Dead Cruise/Investor Event

November 5: 8:30AM: MPEL 3Q CC - , PW: MPEL

headline news 

Macau Transit Visas -  Macau’s transit visa scheme “is set to undergo a significant positive shift at year end,” says a new note from Union Gaming Securities Asia Ltd, quoting “multiple local sources.”  According to Union Gaming’s note, “persons entering Macau (ostensibly) for the purposes of transiting to a third party country would be allowed to stay for up to 14 days (from 7) upon one’s first entry into Macau during any given month, and would then be allowed to stay up to 7 days (from 2) for a second entry during the same month.”  


Takeaway: Government trying to make a difference, on th positive side.


WYNN - Wynn Resorts executives unveiled a handful of tweaks to their design for a $1.7 billion hotel and casino complex in Everett, MA including the substitution of a smaller, premium “ultra lounge” for a previously planned nightclub.  In a presentation to the Massachusetts Gaming Commission, Wynn said the size of the entire resort had only increased by about 3%.  

  • Wynn’s new plan calls for about 37,000 square feet of convention and meeting space. The “ultra lounge” is a newer approach to bars, DeSalvio said, which is currently being developed by Wynn in Las Vegas.  
  • Wynn said the change was, in part, driven by the difference in liquor laws between Massachusetts and Nevada.  “In Las Vegas, you can keep the bars open all night. And here, you can’t,” said DeSalvio, president of Wynn Everett.


Takeaway: We're still skeptical on the ROI


SUNCITY GROUP - Alvin Chau Cheok Wa, owner and chairman of major Macau junket operator Suncity Group, says it is “absolutely possible” that the city could see growth in casino earnings again next year, and that the trend of continuous closures of VIP gaming rooms seen in recent months would end.  The Suncity boss believes that Macau's gaming market has now bottomed out as “all the bad news” for the industry has already been digested and reflected.


Takeaway: While we're positive on the stocks over the near term, we've heard the bottoming story before. I suppose gaming revenue growth could turn positive - we're forecasting a GGR decline - but earnings? 


0296.HK - Emperor Entertainment Hotel Ltd, owner and operator of Macau casino property Grand Emperor Hotel, said it expects to record a “significant decrease” in consolidated net profit for the six months ended September 30, 2015, compared to the prior-year period.  The decline is attributable to “a net loss on the hotel property valuation due to the downturn of the Macau property market,” the company said in a filing to the Hong Kong Stock Exchange on Friday. The net loss “is a non-cash item and will not have a direct impact on the operation of the group,” the firm added. 



PAGCOR - The state-run Philippine Amusement and Gaming Corp (Pagcor) reported net income of PHP3.2 billion ($68.3 million) for the first nine months of 2015, up by 37.1% YoY. Pagcor said it was 24.6% ahead of its own PHP2.6 billion target for net income in the nine-month period.  Total revenue for the first nine months of 2015 rose 18.7% YoY to PHP35.7 billion, Pagcor reported. For the third quarter alone, total revenue was PHP10.9 billion.



UBER - In Germany, Uber withdrew from three major cities after the regulators urged the company to file in complex paperwork. Now, Uber officially abandoned Düsseldorf, Frankfurt and Hamburg.  In Germany, the only places where the car hailing app is still operational are Munich and Berlin.



Macau GGR - Macau’s casino GGR for October fell by 28.4% YoY to MOP20.06 billion ($2.5 billion), according to data released on Sunday by the city’s regulator, the Gaming Inspection and Coordination Bureau. It was the 17th straight month of GGR retreat measured year-on-year but the best monthly tally for the industry since May. 


Takeaway: Slightly better than anticipated


Macau Slots - Macau Gaming Equipment Manufacturers Association president Jay Chun thinks the gaming industry’s shift toward the mass market as the VIP market slumps is an opportunity for gaming machine makers to exploit, Business Daily reports.  “The industry is focusing on increasing the proportion of mass market,” the newspaper quotes Mr Chun as saying in an interview given in advance of this month’s Macao Gaming Show, which his association organises.  



Taiwan Casino - Residents in Taiwan’s outlying island of Penghu could vote again on whether to allow casinos in the county, reports Taiwan’s Central News Agency. The local government’s Referendum Screening Committee on Friday approved a proposal to hold a referendum early next year.  The success of Taiwan’s casino industry however could depend on mainland China’s visa policies.  Mainland China officials earlier this year have ruled out the idea of that country’s citizens being allowed to gamble in Taiwan casinos if such schemes ever come to fruition.



Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more

REPLAY: Review of $EXAS Earnings Call (A Hedgeye Best Idea Long)

Our Healthcare Team made a monster call to be long EXAS - hear their updated thoughts.

read more

Capital Brief: 5 Things to Watch Right Now In Washington

Here's a quick look at some key issues investors should keep an eye on from Hedgeye's JT Taylor and our team of Washington Policy analysts in D.C.

read more

Premium insight

[UNLOCKED] Today's Daily Trading Ranges

“If I could only have one thing of the many things we have it would be my daily ranges." Hedgeye CEO Keith McCullough said recently.

read more

We'll Say It Again: Leave Your Politics Out of Your Portfolio

If your politics dictates your portfolio positioning, the Democrats and #NeverTrump crowd out there have had a hell of a week.

read more