“The increase in our net profit by 451% during the first quarter of 2010 and the increase in our Adjusted EBITDA by 155% show that we are obtaining positive results from the past year’s initiatives to expand capacity as well as to increase efficiency and operating leverage throughout our casino portfolio. While overall market conditions have been favourable, the fact that we have increased our market share testifies to the fundamental strength and excellent positioning of our business. We look forward to excellent prospects for the Group during the rest of the year.”

- Dr. Ambrose So, Chief Executive Officer of SJM Holdings Limited



  • Group gaming revenue of during 1Q2010 was HK$12,683 million, an increase of 74% from HK$7,280 million 
  • Adjusted EBITDA was HK$1,096 million, an increase of 155% from HK$430 million in the year earlier quarter
  • Profit attributable to owners was HK$760 million, an increase of 451% y-o-y increase from HK$138 million
  • SJM's gaming revenues accounted for 31.9% of Macau’s casino gaming market during 1Q2010, as compared with 28.8% 1Q09.
    • Group’s VIP gaming revenue was HK$8,282 million, a 104% y-o-y increase
    • Mass market gaming revenue was HK$4,122 million, an increase of 39% from HK$2,974 million
    • Slot machine revenue was HK$279 million, an increase of 11% from HK$250 million
  • 1Q2010 average table and slot counts:
    • VIP: 411 (first quarter 2009: 206)
    • Mass: 1,361 (first quarter 2009: 1,163)
    • Slots: 4,614 (first quarter 2009: 3,920)
  • 1Q2010 Group VIP chip sales were HK$288.5 billion (first quarter 2009: HK$140.8 billion), and the VIP gaming hold percentage (before commissions and discounts) was 2.87% (first quarter 2009: 2.88%).
  • Breakout of revenues and EBITDA for 1Q2010:
    • Grand Lisboa: HK$3.165BN and HK$508MM
    • Other self promoted casinos: HK$2.955BN and HK$240MM
    • Third party operated casinos: $6.563BN and HK$270MM
  • Adjusted EBITDA margins for the group were 8.6%, but would be 14.8% if calculated on a comparable basis to US properties.  If the Group’s revenue is further adjusted to include the net revenue of self-promoted casinos plus the net revenue contribution (after reimbursed expenses) of the Group’s third party-promoted casinos and slot halls, the Group’s Adjusted EBITDA margin would be 26.0%.
  • Grand Lisboa Hotel achieved average occupancy rate of 72.2% and average room rate of HK$1,924 per night.


  • The 1Q2010 results show the benefits of the new agreements they have in place with their junkets.
  • Casino Oceanus is still in its ramp up state, but they are pleased with their results YTD
  • They are going to start the renovation of Casino Jai Alai later this year
  • Completing the installation of a new table and player tracking system at Casino Grand Lisboa
  • Considering the development of a site in Cotai and their site next to the Portuguese school, but have made no decision so far


  • Oceanus results so far?
    • Will do it midyear, just can’t do it this yet since they haven’t separated all accounts
  • They are considering developing on Cotai – and are waiting to see if they will proceed before making a dividend payment
  • Why doesn’t the sum of the Grand Lisboa, other owned casinos and satellites equal the total group EBITDA?
    • Because it doesn’t include the Grand Lisbao hotel  (36MM) and Ponte 16 (34MM) and some other investments (8MM). Those breakouts are already including corporate expense allocation.
  • Interest expense was $56MM
  • Interest income was $10.3 MM
  • D&A was 266MM
  • How much of the other owned casino EBITDA was from Oceanus?
    • Casino Lisboa is contributing more than Oceanus at this point
  • Moved to 3% and 5% franchise deals, average is 4.1%- some of that mix depends on the mix of VIP and Mass business
  • Impact of Encore?
    • Doesn’t appear to have any impact on their business.  May be taking share from other more ‘related’ operators
  • April is quite good and first half of May is even better because of Golden Week. They have no complaints of their market share. May trends should soften in the back half.
  • Margins are always higher in non-gaming since you don’t have the taxes.
  • Is this level of EBITDA sustainable?
    • It's been an exceptional quarter for the market.  They have been anticipating a softening of the VIP market but haven't seen it yet.  So they are unsure how much the softening will be offset by seasonally better trends.
  • Third party operated casino strategy is to encourage those properties to promote their casinos.  They didn't hold as well in their owned casinos, which is why the Satellite casinos appear to be growing faster.
  • The third party casinos have begun to realize that there is margin in the Mass now that they are "emancipated" to run their business as they wish, and the results reflect them growing that business
  • Portuguese school site is still more of a priority over developing the Cotai site.
  • Margins going forward at Grand Lisboa?
    • They are looking for margin improvement. They have been continuously doing that.
  • Satellite properties will benefit from their discovery of Mass business. The new contracts encourage them to market their own properties.
  • Jai Alai renovation capex: 100-200 MM $HK
  • Their Adjusted EBITDA was up 30% from the 4th Q
  • Table cap is for the next three years and by the time they open anything in Cotai it would be expired - since they haven't started construction.  After 3 years, there will be 3-5% annual table growth. Won't do anything without the government's blessing.
  • Why are they expecting a slowdown?
    • Money supply in China is really loose now. But as high-end individuals are less able to forecast their growth, they will be less likely to play.  Government has suppressed the housing market already and the stock market performance has also been poor, so it should affect play levels.
  • Expect that their market can stay at current levels or improve.  Will not open new tables or close tables, but will better yield manage their tables. Were fortunate enough to increase tables late last year before table caps went into place.  There has been no talks of reducing any concessionaire's tables.
  • Run rate expenses of Grand Lisbao? There has been no increase due to labor or marketing costs. Any margin pressure is a result of mix shift towards VIP.
  • Maintenance Capex? It's a lot lower than Venetian. It's only HK$200-250MM for them and HK$700-800MM in total capex for the year.

Cartoon of the Day: 'Biggest Tax Cut Ever'

President Donald Trump's economic team unveiled what he called last week, "the biggest tax cut we’ve ever had.” Before you get too excited about that hang on a sec. "Trump Tax Reform ain’t gettin’ done anytime soon," Hedgeye CEO Keith McCullough wrote in today's Early Look.

read more

Neurofinance: The Psychology Behind When To Sell A Bull Market

"Most momentum investors stay invested too long, under-reacting and holding tight after truly bad news finally arrives to break the trend," writes MarketPsych's Richard Peterson.

read more

Energy Stocks: Time to Buy the Dip? | $XLE

What the heck is happening in the Energy sector (XLE)? Energy stocks have trailed the S&P 500 by a whopping 15% in 2017. Before you buy the dip, here's what you need to know.

read more

Cartoon of the Day: Hard-Headed Bears

How's this for "hard data"? So far, 107 of 497 S&P 500 companies have reported aggregate sales and earnings growth of 4.4% and 13.2% respectively.

read more

Premium insight

McCullough [Uncensored]: When People Say ‘Everyone is Bullish, That’s Bulls@#t’

“You wonder why the performance of the hedge fund indices is so horrendous,” says Hedgeye CEO Keith McCullough, “they’re all doing the same thing, after the market moves. You shouldn’t be paid for that.”

read more

SECTOR SPOTLIGHT Replay | Healthcare Analyst Tom Tobin Today at 2:30PM ET

Tune in to this edition of Sector Spotlight with Healthcare analyst Tom Tobin and Healthcare Policy analyst Emily Evans.

read more

Ouchy!! Wall Street Consensus Hit By Epic Short Squeeze

In the latest example of what not to do with your portfolio, we have Wall Street consensus positioning...

read more

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more