SJM Sector Report: Gaming Wynn Macau Melco Crown MGM …

GT

JA

Researc

h 国

泰君

安研

究

GT

JA

Researc

h 国

泰君

安研

究

Gam

ing S

ecto

r 博

彩

Port

Secto

r 港口业

Se

cto

r R

ep

ort

See the last page for disclaimer of 23

Sector Report: Gaming Noah Hudson

行业报告：博彩 +86 755 23976684

[email protected]

13 March 2015

Challenges Persist as the Sector Searches for a Bottom 挑战仍然存在，行业寻找底部

In 2014, Macau visitors increased by 7.5% to 31.5 million but total Gross

Gaming Revenue (“GGR”) declined by 2.6%, the first decline since the

industry’s opening up in 2002.

Catalysts: 1) Casino hotel rooms will increases by 18.9% this year,

bringing some alleviation to Macau’s hotel room bottleneck (2014

casino hotels occupancy was at near capacity at 96.4%, the highest

ever). 2) US$7.3 billion in new casino development to go into operation

in 2015, increasing the number of gaming tables by 17.5%. In addition,

several important infrastructure projects under development most likely won’t

be ready until after 2015: 3) Macau Intercity Light Rail Transit, 4) Pac On ferry

terminal, 5) HK-Zhuhai-Macau Bridge, 6) Zhuhai-Macau New Channel

pedestrian border crossing and 7) increased capacity at the Macau Airport.

Challenges and threats: 1) the ongoing anti-corruption campaign, 2)

Beijing has set low 2015 GDP and M2 growth targets, 3) a full smoking

ban in casinos is likely to be implemented and 4) Macau is planning to

cap the number of mainland visitors. We also think the Philippines and

South Korea are threats and will cut into Macau’s market share this year.

We forecast 1Q15 to 4Q15 Macau GGR qoq growth of -16.9%, -4.0%,

5.7% and 8.1%, respectively; this works out to a 2015 full year decline of

27.2%. GGR could decline further sequentially, but we think we are

approaching the bottom if not there already. In 2015, we expect flat mom

growth except for when new casino hotel room or gaming table capacity is

added. Downgrade sector outlook to “Neutral”

2014 年，澳门的入境旅客量增长 7.5%至 3,150 万，但是总博彩收入下降 2.6%，是博彩

业自从 2002 年开放之后首次下降。

催化剂：1）今年，赌场酒店客房量将提升 18.9%，部分打通澳门的酒店客房瓶颈（2014

年赌场酒店入住率达到 96.4%，接近爆满，也是历史最高水平）、2）投资额 73 亿美元的

新赌场项目今年开幕，将提升赌台量 17.5%。另外，几个重要基础设施项目大约要到 2015

年之后才完成：3）澳门城际轻轨运输、4）北安码头、5）港珠澳大桥、6）粤澳新通道以

及 7）扩建澳门机场。

挑战和威胁：1）持续反腐工作、2）北京制定较低的 2015 年国内生产总值增长和 M2 货

币供应量增长目标、3）澳门政府拟通过法案在赌场完全禁止吸烟以及 4）澳门正在计划限

制内地旅客量。我们也认为菲律宾和韩国是威胁，今年将啃掉部分澳门的市场份额。

我们分别预期 2015 年 1 季度至 2015 年 4 季度澳门总博彩收入环比增长为-16.9%、-4.0%、

5.7%和 8.1%，相当于 2015 年全年下降 27.2%。我们认为总博彩收入有可能进一步环比

下降，但是应该快要见底（或许已经见底）。我们预期澳门总博彩收入增长在 2015 年除

了有新增赌台或者酒店客房的那些月份之外，月环比持平。下调行业评级至“中性”。

Rating: Neutral Downgraded

评级：中性 (下调)

Stock performance 股价表现

Source: Bloomberg.

Company Name

公司名称

Code

编号

Price

股价

(HK$)

Rating

投资评级

FY14 PER

市盈率

(x)

FY15PER

市盈率

(x)

FY16 PER

市盈率

(x)

FY14 PBR

市净率

(x)

FY14 ROE

净资产收益率

(%)

FY14 Yield

股息率

(%)

Mgm China 02282 HK 14.600 Neutral 9.7 13.6 15.0 8.7 88.9 9.2

Galaxy Entertain 00027 HK 34.200 Accumulate 13.3 12.2 12.5 9.2 30.5 6.2

Wynn Macau Ltd 01128 HK 17.260 Neutral 13.9 19.2 15.7 7.9 62.6 4.8

Melco Crown Ente MPEL US US$21.335 n.a. 9.7 13.6 15.0 2.4 10.8 2.5

Sjm Holdings Ltd 00880 HK 9.790 n.a. 13.3 12.2 12.5 2.2 22.5 9.4

Sands China Ltd 01928 HK 31.300 n.a. 13.9 19.2 15.7 5.1 34.3 7.0

Weighted Average. 市值加权平均

Neutral 13.2 15.3 13.8 6.0 37.6 6.3

Source: Bloomberg, Guotai Junan International.

(60.0)

(50.0)

(40.0)

(30.0)

(20.0)

(10.0)

0.0

10.0

20.0

30.0

Mar-14 Apr-14 Jun-14 Jul-14 Sep-14 Oct-14 Dec-14 Jan-15 Mar-15

% return

HSI SJM GalaxyWynn Macau Melco Crown MGM ChinaSJM

mailto:[email protected]

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


Table of Contents

Table of Contents ........................................................................................................................................... 2

COMPETING GAMBLING JURISDICTIONS ............................................................................................... 3

Singapore ...................................................................................................................................................... 3

Philippines ..................................................................................................................................................... 3

South Korea................................................................................................................................................... 5

Taiwan .......................................................................................................................................................... 6

Vietnam ........................................................................................................................................................ 6

Japan ............................................................................................................................................................. 6

MACAU CASINO INDUSTRY ....................................................................................................................... 7

Visitors .......................................................................................................................................................... 7

Recent Infrastructure Improvements ........................................................................................................... 11

Catalysts – Infrastructure, Casino & Hotel Development .............................................................................. 12

Challenges & Risks ....................................................................................................................................... 15

Macau Gross Gaming Revenue .................................................................................................................... 17

Our 2015 Macau GGR Forecasts .................................................................................................................. 19

APPENDIX .................................................................................................................................................... 20

Macau Gaming Historical Development ....................................................................................................... 20

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


COMPETING GAMBLING JURISDICTIONS

In 2014, gross gaming revenue decreased in Macau and Singapore but increased in South Korea and the Philippines.

Even with the 2.6% decline in its 2014 gross gaming revenue (GGR), Macau is by far the world’s largest gaming destination

with US$44,009 million in 2014 GGR. The second highest was the Las Vegas Strip, which had casino revenue of US$6,373

million last year. Singapore’s 2014 gross gaming revenue (GGR) was US$5,982 million down 1.6% from 2013, slightly better

than the 2.6% drop for Macau’s 2014 GGR. However, not all Asian gaming jurisdictions suffered along with Macau and

Singapore in 2014. For the first three quarters of 2014, casino revenue for South Korea increased 10.9% yoy to US$1,902

million and casino revenue for the Philippines increased 19.0% yoy to US$949 million.

Figure-1: USA, Macau & Singapore Gaming Revenues Figure-2: Macau, South Korea & Philippines Gaming

Revenues

Source: Gaming Inspection and Coordination Bureau Macao SAR, Bloomberg,

University of Nevada, Las Vegas, Guotai Junan International. Note: US Total for 2014 is an estimate of Guotai Junan International.

Source: Gaming Inspection and Coordination Bureau Macao SAR, Bloomberg,

Guotai Junan International.

Singapore

With no plans for further casino development, we don’t think Singapore will have much impact in diverting

incremental demand from Macau in the foreseeable future.

Singapore GGR decreased by 1.6% in 2014, with 4.7% decline in the VIP segment, partially offset by 8.2% increase in

the mass market. Gaming in Singapore began in 2010, when it opened its first two (and currently still the only) casinos, Las

Vegas Sands (LVS US)'s Marina Bay Sands and Genting Group (3182 MYX)'s Resorts World Sentosa. Despite the

competition, in 2010, Macau’s GGR surged a record 58%, and grew another 42% in 2011. We think Singapore, which is a four

hour flight from Guangzhou, China, will have a limited impact on drawing PR China gamblers as long as it maintains its

relatively rigid visa policies for PR passport holders. For example, PR nationals applying for a Singapore tourist visa must

have a local Singapore resident who must provide a letter of introduction. Also, there are no new casinos planned for

Singapore.

Philippines

With City of Dreams Manila opened on Feb. 2, we think the Philippines will take incremental market share from Macau

in 2015.

Entertainment City casino resort hub in Manila Bay, Philippines, opened the first of its four planned casinos in March

2013. The Philippines, which has had a history of gaming since the 1800’s when it was a Spanish colony, didn’t open its first

Macau; 45.2 ; 38%

Singapore; 6.1 ; 5%

US Total*; 66.7 ; 57% 44.0 ; 38%

6.0 ; 5%

66.7 ; 57%

Macau Singapore US Total*

20132014

US$ Billion

Macau; 45.17 ;

93%

Philippines; 1.1 ; 2%

South Korea; 2.3

; 5%34.54; 92%

0.95 ; 3%

1.90 ; 5%

Macau Philippines South Korea

201320141Q - 3Q

US$ Billion

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


large scale casino complex until 2010 with Alliance Global Group Inc and Genting Hong Kong’s Resorts World Manila, which is

currently being extended to double the size of its gaming and hotel facilities in 2017. Now, four operators have been granted

licenses to develop a US$5.9 billion casino resort destination in Philippines’ Manila Bay called Entertainment City.

Entertainment City’s first resort, Bloomberry’s US$1.2 billion Solaire Resort and Casino, opened on March 16, 2013 and

has around 361 gaming tables, 1,623 slot machines and 88 electronic table games.

City of Dreams Manila, the second of four planned Entertainment City casino resorts, opened on Feb. 2, 2015 with 380

gaming tables, 1,700 slot machines and 1,700 electronic table games and Mandarin speaking staff. The members-only

Signature Club has Mandarin-speaking staff and entrance signs in both English and Chinese. With its well recognized brand

among Chinese, we think Melco Crown (Philippines)’s US$1.3 billion City of Dreams Manila will attract a significant number of

Chinese VIP gamers.

Figure-3: City of Dreams Manila Opened on Feb. 2, 2015

Source: www.ggrasia.com.

Two more Entertainment City casinos with total capex of US$3.5 billion are planned to open in 2015 and 2018. The

third Entertainment City casino resort is Japan-based pachinko machine maker Universal Entertainment Corp’s US$2.3

billion Manila Bay Resorts, targeted to open by the end of 2015 with about 500 gaming tables and 3,000 slot machines.

According to the designated executive vice president Matt Hurst, they expect that 75% of revenue will come from international

customers, of which Chinese will be a significant proportion. The last casino development, Alliance Global Group Inc and

Genting Hong Kong’s US$1.1 billion Bayshore City Resorts World broke ground in October 2014 with completion targeted

for the end of 2018.

China and the Philippines’ ongoing territorial dispute as well as travel safety concerns will put a damper on Chinese

enthusiasm for gaming in the Philippines. The Philippines and China have an ongoing dispute over claims on territory in

the South China Sea believed to be rich with mineral and oil reserves and which is also an important trading route. In addition,

eight Hong Kong tourists were killed during a bus hijacking in Manila in 2010 with surviving family demanding an apology and

compensation from the Philippine government, which has refused, leading to tensions with Hong Kong. We think these issues

will limit the number of Chinese tourists willing to travel to the Philippines.

Scheduled to be completed in Oct. 2015, the NAIA Expressway will be a key development since it links from Manila

Bay to Manila airport. The Philippines government is working on improving its infrastructure, which is currently inadequate.

According to its website, the Philippines Department of Public Works and Highways increased its budget by 32.3% in 2014,

and further by 43.5% for 2015. According to the World Economic Forum’s Global Competitiveness Report, the Philippines’

global ranking in terms of quality of roads improved from 114th in 2010-2011 to 87th in 2012-2013. Also, the quality of road

index improved from 2.8 to 3.4 at par with Indonesia and targeting to be in the 4 to 5 territory in 2016.

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


Manila is a 2 hour and 20 minute flight from Guangzhou, and its Entertainment City is specifically targeting China’s

VIP market. For PRC passport holders, visas on arrival are not allowed and they need to apply for travel visas before visiting

the Philippines, providing a bank deposit statement, proof of employment, or property statement. It takes about 7 working days

for the visa application process. Despite the aforementioned political and safety issues, we think that Entertainment

City will still cut into Macau’s VIP market share, especially with Beijing’s ongoing anti-corruption campaign.

South Korea

We think South Korea will take incremental market share from Macau in 2015.

As Macau cooperates with Beijing’s ongoing anti-corruption campaign, South Korea is becoming a major alternative

gaming destination for Chinese; in 2014, there was almost one Chinese tourist visiting South Korea for every three

that went to Macau. The number of Chinese tourists to South Korea surged 46% in 2014 to 6.33 million, equivalent to 29.8%

of the number of mainland visitors to Macau in the same year. Chinese visitors accounted for about 43% of all of South

Korea’s visitor arrivals in 2014. South Korea currently has 16 casinos for foreigners-only and one for locals, according to the

University of Nevada Las Vegas Center for Gaming Research. As is common in Macau, on South Korea’s Jeju island, junkets

loan gambling chips to Chinese VIP players and settle up later in China, thereby allowing gamblers to bypass China’s limits on

taking currency out of the country.

In 3Q14, Chinese VIP players accounted for 66.1% of table drop at the casinos of Paradise Co. (034230 KQ), South

Korea’s largest casino operator which has five casinos in South Korea. Paradise Co. will spend US$26 million expanding

floor space at three of its five casinos, increasing gambling space to cater for the growing number of Chinese visitors and

plans to add 26 gambling tables at its casinos, mostly for baccarat card games, bringing the total to 252. The South Korea

government has said that by 2017 it wants nearly to double the number of foreign tourists it received in 2013, with

high-spending Chinese visitors a particular target.

South Korea is aggressively growing its foreigner only casino industry, already with US$4.7 billion to be invested in

three new casinos planned to open in 2017 and 2018. Genting Singapore (G13 SI) and mainland China developer Landing

International Development (00582 HK) are planning to build a 132,265 square meters US$2.2 billion casino resort in Jeju

island (already a popular casino destination with Chinese tourists), with groundbreaking in Feb. 2015 and scheduled to open

in 2017. Paradise Co. (034230 KQ) and Japan’s Sega Sammy (6460 TYO) in November 2014 broke ground on Paradise City,

a US$1.7-billion casino resort projected to open in 2017 that will be a 15-minute walk from the Incheon International airport.

Also near the Incheon International airport, a consortium including Caesars Entertainment (CZR US) is aiming to start

construction of a 150,000+ square meters US$838.8 million gaming resort in July 2015, with the first phase possibly opening

as early as 2018. Premium mass players can be recognized as VIP players in South Korea and treated better than in Macau.

Casinos in South Korea are also hiring Mandarin-speaking staff and offering VIP treatment to big spending Chinese gamblers

including free flights, limousines and hotel stays.

The South Korean government is planning more casinos for South Korea’s west coast city of Incheon, which is a two

hour flight from Beijing, and also in Jeolla province. In addition to the above two casinos being developed in Icheon, on

January 18, 2015, the South Korean government said it would approve two more foreigners-only casino resorts and the

building of around 5,000 new hotel rooms this year, each with a minimum investment of US$925 million in the Incheon Free

Economic Zone, which is near the Incheon International Airport, 50 kilometres southwest of Seoul. One of these resorts could

be backed by Hong Kong’s Chow Tai Fook Enterprises Ltd, which on November 16, 2014 had signed a letter of intent to invest

US$1.6 billion to create a new South Korean casino resort at Incheon. Additionally, on January 27, 2015, North Jeolla

province, on the country’s southwest coast, announced that it is currently in consultations with two to three U.S. and Chinese

investment funds to build an integrated casino resort and will draw up a plan for KRW1 trillion (US$9.1 million) in investment.

Also, in Feb. this year the Incheon International Airport proposed a KRW5 trillion (US$4.6 billion) to KRW6 trillion casino resort

and is now looking to receive proposals to build the facilities and sign deals this year.

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


Taiwan

Taiwan’s Matsu Islands are a ~30 minute ferry ride from Fujian province and could become a major casino destination,

but not until 2020 at earliest.

The Matsu Islands, located in the Taiwan Strait, are actually closer (~20 km) to mainland China than to Taiwan

mainland (~140 km) and would be a very convenient destination for gamers from PR China’s Southern regions. In

2009, legislation was passed allowing casinos to be built on Taiwanese islands, contingent upon approval by any such island.

Then in July 2012, Matsu, a chain of islands of Taiwan, passed a referendum allowing casinos on their islands. However,

Taiwan still requires a bill stipulating regulations for casinos before it can invite bids to build and run casinos, and such bill has

not been passed yet. The earliest Taiwan might approve such a casino bill would be June 2015, according to the director of the

Centre for the Study of Lottery and Commercial Gaming at the National Taiwan University of Science and Technology. We

estimate that the earliest the island might open any casinos would not be until 2020. Under the current draft law, casino

licenses would be valid for 30 years and taxes capped at 16% of gross gaming revenue, much more attractive terms than in

Macau.

Vietnam

Given its small planned scale, we don’t think Vietnam will be much of a threat to Macau in 2015.

The first casino out of two in the US$4 billion Ho Tram Strip opened in July 2013. Vietnam has several casinos, but the

first world class casino resort, the US$500 million The Grand at Ho Tram Strip didn’t open until July 2013 with 541 rooms and

90 gaming tables, 55 of which were VIP tables. The Grand is just the first phase of development of the Ho Tram Strip, which is

on the beachfront about 130 km (about ~2 hours drive) south of Ho Chi Minh City’s international airport. Canadian Asian Coast

Development is planning to develop the Ho Tram Strip be into a US$4 billion project with up to five resorts with a total of 9,000

five-star rooms, 180 gaming tables and 2,000 electronic gaming machines in two more casinos. Hom Tram strip will target VIP

players from China as the Vietnamese government currently only allows foreign passport holders to gamble at casinos

(although it is considering new law which would allow locals to enter casinos, if passed). However, unless it increases its

currently planned total of just 180 gaming tables, we don’t think the Ho Tram Strip will be much of a threat to Macau.

In addition to the Ho Tram Strip, in January 2015 Vietnam’s government approved plans for a new US$4 billion casino

resort with up to 400 gaming tables and around 2,000 gaming machines. Vietnam has approved plans for the

construction of a casino at Phu Quoc Island, as part of a planned larger tourism and entertainment complex. The project is in

early stages and now looking for foreign investors, who would have to make a minimum capital commitment of US$4 billion

into the resort. Phu Quoc Island, located on the coastal belt of Vietnam, Cambodia and Thailand, is being developed into a

special administrative economic zone by the Vietnamese government.

Japan

We think the earliest Japan might have a casino up and running to challenge Macau is 2020.

Japan could legalize casinos as early as…. 2007? It was reported that Japan’s Liberal Democratic party had hoped to pass

a bill to legalize casinos during the parliamentary session, but last-minute changes and a packed legislative schedule meant

that they would have to wait until the next year; the governor of Tokyo at the time, Shintaro Ishihara envisioned a casino resort

with a 1,000 room hotel…. however, this “news” was from June 2006. Shintaro Ishihara was pushing for casino legalization as

far back as 2000. Since then, it seems that once or twice a year, this same story, or a similar version, repeats itself. After

hopes of a casino bill being passed in Nov. 2014 were dashed, the story now is that it might be passed as early as 2015.

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


MACAU CASINO INDUSTRY

Visitors

Hotel room bottleneck as indicated by all time high occupancy rates is crimping growth. The average occupancy rate

for star rated hotels in Macau increased by 3.4 ppt yoy to 87.0% in 2014, the highest level since data was first recorded in

1997. Occupancy rates for five and four star hotels were even higher, at 87.5% and 87.8% respectively. Looking at just the

hotels of casino operators, the bottleneck is even more severe. In the first three quarters of 2014, average occupancy rate at

the hotels of casino operators was at near full capacity at 96.4%, the highest it’s ever been. The number of visitors to Macau

increased by 7.5% in 2014 but there was almost no growth in the number of hotel rooms.

Figure-4: Macau Star Hotels Occupancy Rates Figure-5: Macau Casino Hotels Occupancy Rates

Source: Government of Macao Special Administrative Region Statistics and Census Service.

Source: the Companies.

Table-1: Macau Star Hotel Rooms Growth

2010 2011 2012 2013 2014

5-star hotels 7.7% 18.5% 17.1% 10.7% 0.0%

4-star hotels -0.1% -0.1% 28.4% 0.7% 0.0%

3-star hotels 1.4% 0.6% 0.0% -0.4% 4.2%

2-star hotels -5.8% 0.0% 5.0% -4.5% 0.0%

Total 4.4% 11.4% 17.0% 6.5% 0.7%


With not enough hotel rooms, more visitors to Macau are going for day trips instead of overnight stays. The

proportion of overnight visitors to Macau decreased from 48.7% in 2013 to 46.2% in 2014. The number of overnight visitors

grew by just 2.1% in 2014, compared to a 12.6% increase in the number of day-trippers. We think the shortage of hotel rooms

as indicated by hotel occupancy rates at near capacity is preventing or making it prohibitively more expensive for a portion of

visitors to stay overnight.

72.1%

80.5%

84.8% 84.2% 83.6%87.0%

50%

55%

60%

65%

70%

75%

80%

85%

90%

2009 2010 2011 2012 2013 2014

Total 5-star hotels 4-star hotels3-star hotels 2-star hotels

80.7%87.5%

90.6% 93.1% 95.3% 96.4%

50%

60%

70%

80%

90%

100%

Galaxy Ent. (00027 HK) Melco Crown (MPEL US)MGM China (02282 HK) Sands China (01928 HK)SJM Holdings (00880 HK) Wynn Macau (01128 HK)Average

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


Figure-6: Same Day Vs. Overnight Visitors Figure-7: Same Day Vs. Overnight Visitors, Growth



Mass Market GGR per visitor growth fell to the lowest on record at 5.8% while that of VIP declined by 17.1%, the first

instance of negative growth on record. 2014 saw the first decline in GGR per visitor since record-keeping began in 2008.

Mass Market GGR per visitor growth of just 5.8% was well below the second lowest figure on record to 2009 when it was

16.1%. As Beijing intensified its anti-corruption crack down, 2014 VIP GGR per visitor plunged 17.1%, pulling down total GGR

per visitor for the year by 9.4%.

We expect GGR per visitor to continue to decline in 2015 as Macau adds more non-gaming attractions to attract a

broader range of tourists and diversify Macau’s offerings to include more than just gaming. Besides casinos, the

opening this year of new developments from Galaxy Entertainment (00027 HK, “GEG”) and Melco Crown (MPEL US) will all

include many non-gaming and family related attractions. Opening on May 27, GEG’s “Galaxy Macau Phase II” and “Broadway”

will bring non-gaming attractions including the world’s longest skytop aquatic adventure river ride, with along with currently

existing attractions will make Galaxy Macau one of the most expansive water parks in Greater China. GEG’s Broadway will

offer family-oriented entertainment featuring shows and performances at its 3,000-seat Broadway Theatre and will also have a

10 screen 3D Cineplex and UA Galaxy Cinemas. Melco Crown’s Studio City, opening in mid 2015, will have a “Batman Dark

Flight” virtual-reality ride, the Warner Bros. Family Entertainment Center, the Golden Eye, which at 130 meters will be Asia's

highest Ferris wheel, a 30,000 sq. foot Family Entertainment Center for kids, the House of Magic, a 5,000-seat Studio City

Entertainment Center for live entertainment, a fully-operational TV broadcast studio, Pacha Nightclub, and an exotic jungle

river-themed water ride, among other things.

Figure-8: Macau GGR per Visitor Figure-9: Macau GGR per Visitor, Growth

Source: Government of Macao Special Administrative Region Statistics and

Census Service.


Census Service.

In 2014, Macau’s number of visitors increased by 7.5% to 31.53 million but GGR declined by 2.6%. This contrasts to

2013, when tourist arrivals increased by just 4.4%, but GGR increased by 18.6%. So, the number of visitor arrivals is not

52.2% 52.2% 53.8% 51.7% 51.3% 53.8%

47.8% 47.8% 46.2% 48.3% 48.7% 46.2%

0%

20%

40%

60%

80%

100%

2009 2010 2011 2012 2013 2014

Same-day Visitors Overnight Visitors

-7.9%

14.9% 15.6%

-3.8%

3.8%

12.6%

-2.0%

14.7%

8.4%

5.0%

5.1%

2.1%

-10%

-5%

0%

5%

10%

15%

20%

2009 2010 2011 2012 2013 2014

Same-day Visitors Overnight Visitors

3.6

5.3

6.8 7.3

7.9

6.5

1.8 2.0 2.5 3.2

4.0 4.3 5.3

7.3

9.3

10.5

11.9 10.8

0

2

4

6

8

10

12

14

2009 2010 2011 2012 2013 2014

VIP Mass Market Total

HK$ ('000)

14.1%

48.0%

28.9%

7.2% 8.3%

-17.1%

19.1% 16.1%

21.4%

29.7%25.5%

5.8%15.7%

37.5%26.8%

13.2% 13.6%

-9.4%

-20%

-10%

0%

10%

20%

30%

40%

50%

2009 2010 2011 2012 2013 2014

VIP Mass Market Total

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


indicative of GGR growth. The Macau Government Tourist Office now expects tourist arrivals to increase by 5% in 2015.

However, we think this is overly conservative, given Macau’s newly added gaming capacity, hotel rooms and other attractions

in 2015 and also since in the past the Macau Government Tourist Office has been overly conservative in its forecasts (actual

visitor growth in 2014 of 7.5% was higher than the Macau Government Tourist Office expectations of less than 5% growth

when they made their forecast in January 2014.)

The number of visitors from PR China increased by 14.1% in 2014 while the number of visitors from Hong Kong and

Taiwan decreased. Improved travel infrastructure including high speed rail has made it easier and more convenient for

mainlanders from further away provinces to travel to Macau. The proportion of mainlanders increased by 3.9 ppt last year to

67.4% of Macau’s visitors. The number of visitors from Hong Kong and Taiwan declined by 5.0% and 4.7%, respectively. We

expect the number of visitors from mainland, Taiwan and Hong Kong to increase in 2015 as more people come to see

the new casinos and attractions opening this year.

Figure-10: Macau Visitors by Place of Origin, Growth Figure-11: Macau Visitors by Place of Origin, % of Total


Census Service.


Census Service.

As travel infrastructure continues to improve, including more high speed rail, more and more mainland visitors are

coming from further away provinces. In 2014, mainland visitors from Northwest China increased the most, up 23.9% yoy,

followed by a 23.6% increase in visitors from Northeast China. More direct flights connecting Macau to mainland cities

including Tianjin, Xian and Shijiazhuang also helped support travel from far away provinces. Guangdong was still the

dominant source of visitors, but the proportion of total mainland visitors from Guangdong province decreased by 0.5 ppt in

2014 to 49.5%.

Figure-12: PRC Visitors by Region, % of Total Figure-13: PRC Visitors by Region, Growth


Note*: South Central China includes Guangdong, Hunan, Hubei, Henan and, Guangxi;

East China includes Fujian, Zhejiang, Jiangsu, Shanghai, Jiangxi, Shandong and Anhui;


Note*: South Central China includes Guangdong, Hunan, Hubei, Henan and, Guangxi;

East China includes Fujian, Zhejiang, Jiangsu, Shanghai, Jiangxi, Shandong and Anhui;

-5.4%

20.4%22.2%

4.6%

10.2%14.1%

-4.1%

11.0%

1.6%

-6.6% -4.4% -5.0%

-1.8%

0.0%

-6.0%

-11.8%-6.6%

-4.7%

-5.1%

14.8%

12.2%

0.3%

4.4%7.5%

-20%

-10%

0%

10%

20%

30%

2009 2010 2011 2012 2013 2014

Mainland China Hong KongTaiwan, China Total

50.5% 53.0% 57.7% 60.2% 63.5% 67.4%

30.9% 29.9%27.1% 25.2% 23.1% 20.4%

5.9% 5.2% 4.3% 3.8% 3.4% 3.0%12.6% 11.9% 10.9% 10.8% 10.0% 9.2%

0%

20%

40%

60%

80%

100%

2009 2010 2011 2012 2013 2014

Mainland China Hong Kong Taiwan, China Other

66.9% 63.5% 63.3% 62.9%

20.9% 20.9% 20.8% 20.5%

5.0% 6.8% 6.6% 7.0%4.1% 4.3% 4.5% 4.9%

0%

20%

40%

60%

80%

100%

2011 2012 2013 2014

South Central China East ChinaNorth China Northeast ChinaSouthwest China Northwest China

12.4%11.7%

19.6%23.6%

8.9%

23.9%

-10%

0%

10%

20%

30%

40%

50%

2012 2013 2014

South Central China East ChinaNorth China Northeast ChinaSouthwest China Northwest China

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


North China includes Beijing, Hebei, Shanxi, Inner Mongolia and Tianjin;

Northeast China includes Liaoning, Heilongjiang and Jilin; Southwest China includes Sichuan and Chongqing;

Northwest China includes Shaanxi.

North China includes Beijing, Hebei, Shanxi, Inner Mongolia and Tianjin;



Figure-2: PRC Visitors by Province/Municipality and by Region, % of Total 2011 2012 2013 2014

Province/Region Guangdong 56.2% 52.0% 51.0% 49.5%

Fujian 6.4% 5.3% 4.9% 5.0%

Hunan 3.7% 3.9% 4.1% 4.1%

Zhejiang 3.9% 4.1% 4.0% 3.8%

Hubei 2.8% 3.2% 3.4% 3.7%

Jiangsu 3.0% 3.1% 3.2% 3.2%

Shanghai 3.2% 3.3% 3.3% 3.0%

Henan 1.9% 2.1% 2.3% 2.8%

Guangxi 2.3% 2.4% 2.5% 2.8%

Jiangxi 2.0% 2.2% 2.3% 2.5%

Sichuan 2.0% 2.2% 2.4% 2.2%

Beijing 2.2% 2.1% 2.2% 2.1%

Hebei 1.1% 1.5% 1.5% 1.9%

Liaoning 1.7% 1.7% 1.8% 1.9%

Helongjiang 1.2% 1.4% 1.5% 1.7%

Shandong 1.2% 1.4% 1.7% 1.7%

Chongqing 1.2% 1.3% 1.4% 1.4%

Anhui 1.2% 1.4% 1.4% 1.4%

Shanxi 1.0% 1.4% 1.3% 1.4%

Jilin 1.1% 1.2% 1.1% 1.3%

Shaanxi 0.0% 1.0% 1.0% 1.1%

Inner Mongolia 0.0% 0.8% 0.8% 0.8%

Tianjin 0.7% 0.8% 0.8% 0.8%

Region*

South Central China 66.9% 63.5% 63.3% 62.9%

East China 20.9% 20.9% 20.8% 20.5%

North China 5.0% 6.8% 6.6% 7.0%

Northeast China 4.1% 4.3% 4.5% 4.9%

Southwest China 3.2% 3.5% 3.7% 3.6%

Northwest China 0.0% 1.0% 1.0% 1.1% Source: Government of Macao Special Administrative Region Statistics and Census Service. Note*: South Central China includes Guangdong, Hunan, Hubei, Henan and, Guangxi;

East China includes Fujian, Zhejiang, Jiangsu, Shanghai, Jiangxi, Shandong and Anhui; North China includes Beijing, Hebei, Shanxi, Inner Mongolia and Tianjin;



In 2014, 49.4% of Macau’s visitor arrivals entered at the Gongbei Border crossing in Zhuhai. Of all Macau visitors, 55.2%

arrived by land, 38.3% by ferry boat and only 6.5% by air. A number of infrastructure projects have just been completed,

others are still under works or being planned and are slated to complete from 2015 to 2039 which will make for easier access

to Macau. The expanded capacity for handling incoming travelers will help shorten time at the borders and encourage more

tourist arrivals.

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


Table-3: Macau Visitors by Entry Point

2009 2010 2011 2012 2013 2014

NUMBER OF VISITORS

Gongbei Border Gate 10,624 12,024 14,161 13,591 14,250 15,574

Other land 825 1,063 1,139 1,239 1,568 1,816

By land 11,449 13,087 15,300 14,830 15,817 17,390

Outer Harbour 5,998 6,462 7,125 7,042 7,072 7,363

Inner Harbour 284 350 474 541 503 473

Provisional Ferry Terminal in Taipa 2,403 3,431 3,422 3,902 3,982 4,244

By sea 8,685 10,244 11,021 11,485 11,558 12,081

Airport 1,584 1,612 1,656 1,739 1,907 2,027

Heliport (Outer Harbour) 35 22 26 29 43 28

By air 1,619 1,634 1,682 1,768 1,950 2,055

Total 21,753 24,965 28,002 28,082 29,325 31,526

GROWTH

Border Gate -5.3% 13.2% 17.8% -4.0% 4.9% 9.3%

Other land -5.9% 28.9% 7.1% 8.8% 26.5% 15.8%

By land -5.3% 14.3% 16.9% -3.1% 6.7% 9.9%

Outer Harbour -17.5% 7.7% 10.3% -1.2% 0.4% 4.1%

Inner Harbour -22.0% 23.6% 35.2% 14.2% -7.0% -5.9%

Provisional Ferry Terminal in Taipa 56.3% 42.8% -0.3% 14.0% 2.1% 6.6%

By sea -5.3% 18.0% 7.6% 4.2% 0.6% 4.5%

Airport -2.9% 1.7% 2.8% 5.0% 9.6% 6.3%

Heliport (Outer Harbour) 1.9% -36.3% 14.7% 12.1% 49.9% -34.7%

By air -2.8% 0.9% 2.9% 5.1% 10.3% 5.4%

Total -5.1% 14.8% 12.2% 0.3% 4.4% 7.5%

% OF TOTAL VISITORS

Border Gate 48.8% 48.2% 50.6% 48.4% 48.6% 49.4%

Other land 3.8% 4.3% 4.1% 4.4% 5.3% 5.8%

By land 52.6% 52.4% 54.6% 52.8% 53.9% 55.2%

Outer Harbour 27.6% 25.9% 25.4% 25.1% 24.1% 23.4%

Inner Harbour 1.3% 1.4% 1.7% 1.9% 1.7% 1.5%

Provisional Ferry Terminal in Taipa 11.0% 13.7% 12.2% 13.9% 13.6% 13.5%

By sea 39.9% 41.0% 39.4% 40.9% 39.4% 38.3%

Airport 7.3% 6.5% 5.9% 6.2% 6.5% 6.4%

Heliport (Outer Harbour) 0.2% 0.1% 0.1% 0.1% 0.1% 0.1%

By air 7.4% 6.5% 6.0% 6.3% 6.6% 6.5%


Recent Infrastructure Improvements

Starting from Sept. 2014, Mainlanders can use an electronic pass to cross the border into Macau in seconds at

“e-channels”. A test-pilot program began in May last year allowing Guangdong residents to obtain and use an electronic

pass (“e-pass”) to enter Macau. By July, 2014, the number of e-passes in use to cross Macau’s borders had reached 200,000,

four times more than the 50,000 permits recorded in June. By August, 117 e-channels were in use at the Gongbei border gate.

The new e-pass is an ID card embedded with an electronic integrated circuit chip that stores travelers’ personal data. The

period of validity for an adult permit will be extended to 10 years, while the validity period for juveniles under the age of 16 will

remain five years.

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


Gongbei (also called Border Gate) border crossing opening hours were extended by two hours on Dec. 18, 2014, now

open from 6:00 a.m. to 1:00 a.m. (7:00 a.m. to 12:00 a.m. previously). The Gongbei Border crossing tends to be the most

congested on Monday to Friday mornings until around 9:00 a.m. as in addition to tourists and gamers, workers and students

from mainland pour into Macau. The earlier 6:00 a.m. opening time eases the congestion to some extent and makes wait

times shorter, an obvious plus for gamers.

Lotus Bridge Hengqing Port border crossing opening hours were extended to 24 hours on Dec. 18, 2014 (open from

9:00 a.m. to 8:00 p.m. previously). The Lotus Bridge border crossing at Hengqing Port (known as the Cotai Frontier

Checkpoint on the Macau side) links Macau’s Cotai Strip with Henqing Island in Zhuhai, Guangdong. Given that in 2014, 49.5%

of mainland visitors to Macau were from Guangdong, we expect the new operating hours will bring more Guangdong visitors

to the city. As another benefit, the 24 hour border makes it more convenient for Macau visitors who would prefer to stay at the

less crowded hotels in Hengqin instead in Macau. Lotus Bridge is increasingly becoming an important access point to the new

casinos in Coatai, since according to Legislative Assembly member Chan Meng Kam, traffic on the three bridges connecting

the Macau Peninsula with Cotai has nearly reached capacity. However, the impact of the extended Hengqing Port border

hours will be limited as Hengqin Port’s capacity is much smaller than that of the Gongbei Border crossing; daily average

customs clearances reach 100,000 passengers at Hengqin Port compared to daily capacity of 350,000 at the Gongbei Border.

From Dec. 18, 2014, Zhuhai-Macau Cross-Border Industrial Zone border checkpoint’s operating hours were extended

to 24 hours but only for Macau residents, non-resident workers and students. The extended hours will help alleviate

pressure on the city’s transportation infrastructure and can significantly divide the passenger flow during the morning rush

hour. However, the Industrial Zone Border Checkpoint is not open to tourists, and we don’t expect it to have too much impact

on Macau visitation growth.

Catalysts – Infrastructure, Casino & Hotel Development

Planned Infrastructure Improvements

We believe the Macau Intercity Light Rail Transit (expected to partially

open in 2017) is a critical development as it will ease inter-city traffic

congestion, a key concern among locals who want to cap the number

of mainland visitors. When completed, the Macau Intercity Light Rail

Transit (LRT) will run through the Macau Peninsula, Taipa and Cotai and

access major border checkpoints such as the Gongbei Border crossing, the

Outer Harbor Ferry Terminal, the Lotus Bridge and the Macau International

Airport. It will also provide a convenient way to travel to all the major casino

destinations both in the Macau Penninsula and in Cotai. After a number of

delays, the new start date for only phase one of the LRT is now expected to

be September 2017, according to the Transportation Infrastructure Office.

Macau and Taipa will not be linked before 2018 or 2019.

Of all the infrastructure projects, we think the Macau Intercity Light Rail

Transit is the most important. As discussed in our “Challenges & Risks”

section, the Macau government is planning to cap the number of visitors

allowed to Macau in order to prevent overcrowding and congestion in the city.

New and expanded border crossings won’t do much good in driving

incremental visitation to Macau if Macau’s inter-city infrastructure is

insufficient to handle more visitors.

Figure-14: Macau Intercity Light Rail

Transit System

Source: Macau Transportation Infrastructure Office.

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


Another key project is the Pac On ferry terminal (which could open as early as this year, but probably later) which will

add capacity of up to 15 million passengers per year (more than the total 12.1 million passengers who entered Macau

by ferry in 2014). We think this will have a large impact in increasing visitation to Macau since in 2014, 38.3% of all visitors

came by ferry. The MOP3.2 billion (US$400.8 million) Pac On (also called Taipa) Ferry Terminal is set to become Macau’s

largest ferry terminal. Construction began in 2005 and was first intended to be up and running by 2007, but has been delayed

several times. The Pac On Ferry Terminal could be opened by as early as this year, but given the Macau government’s track

record of infrastructure project delays, we would be surprised if it were ready by this year. However, a scaled down temporary

ferry terminal, located just beside the final Pac On ferry terminal’s construction site, has serviced Taipa since 2007.

We expect the HK-Zhuhai-Macau Bridge (expected to be completed in 2017 or 2018) will have a significant impact in

increasing visitation to Macau since a large portion of Macau visitors come through Hong Kong (20.4% in 2014). The

under-construction Hong Kong-Zhuhai-Macau Bridge is a series of bridges and tunnels that will connect the west side of Hong

Kong to Macau and to the mainland Chinese city of Zhuhai. It will shorten the distance from Hong Kong to Macau from 60 km

to 30 km, and reduce the journey time to from ~3 hours currently to 1/2 an hour, for an estimated charge of RMB100-150 each

way. Construction began on 15 December 2009. After a series of delays, it will most likely be further delayed until 2017 or

even later, said Li Chunhong, the director general of Guangdong’s Development and Reform Commission, according to the

South China Morning Post.

Zhuhai-Macau New Channel pedestrian border crossing in IIha Verde could start construction as early as this year

and be ready by 2016. The new 24 hour pedestrian border crossing would have capacity of up to 250,000 crossings per day,

rivaling the 350,000 daily capacity at the Gongbei Border crossing. The New Channel was first announced in May 2012, and is

to be located at the North-West end of Macau, just 800 meters from the Gongbei Border crossing at the North-East end of

Macau. The New Channel crossing would be for pedestrians only and not have facilities for vehicles. The completion date has

not been determined but construction is expected to begin this year. Obstacles to construction remain, including that currently

there is a wholesale market at the proposed location of the crossing which would have to be relocated. We think this border

crossing, if completed, will have a huge impact on easing congestion at the Gongbei border and thus increase

visitation to Macau.

Macau International Airport expected to increase capacity by 33% to 50% from 6 million to 8 or 9 million passengers

per year in 2018. The Macau International Airport Company (CAM) will launch construction on an expansion to the airport this

year, according to contruction-post.com. CAM had previously announced plans to increase airport capacity by extending the

passenger terminal. CAM expects the expansion to be completed in 2018, increasing airport capacity from 6 million

passengers per year currently to 9 or 10 million. However, the current capacity for planes hasn’t been saturated; there were

only 2 million arrivals at the Macau Airport in 2014. The expansion is expected to allow for more airlines and flight routes. We

think the airport expansion is Macau’s least important infrastructure project since 1) only 6.4% of visitors arrived via the airport

in 2014; and 2) only 2.0 million visitors arrived to Macau via the airport in 2014, meaning that current airport capacity of 6

million is more than sufficient.

Table-4: Macau Planned Infrastructure Projects

2014 Capacity

Planned

Capacity

Completion

Date

Macau Intercity Light Rail Transit 0 n.a. 2017

Pac On (Taipa) Ferry Terminal n.a. 41,000 / Day 2015, Earliest

HK-Zhuhai-Macau Bridge n.a. n.a. 2017 / 2018

Zhuhai-Macau New Channel Pedestrian Border n.a. 250,000 / Day Undetermined

Macau International Airport 6 million / Year 8 to 9 mn / Year 2018

Source: Guotai Junan International.

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


Planned Casino Development

In 2015, approximately US$7.3 billion in new casino development is planned to come into operation, increasing the

number of gaming tables by 17.5% and the number of casino hotel rooms by 18.9%. Galaxy Macau Phase II along with

Broadway at Galaxy Macau are expected to open on May 27 with 500 gaming tables and 1,350 hotel rooms. Then in 3Q15,

Melco Crown (MPEL US) will open its Studio City with around 500 gaming tables and 1,600 rooms. Historically, Macau’s

gaming revenue has increased as new gaming and hotel capacity was added, and we expect that the new capacity this year

will also drive GGR sequential growth.

From 2015 to 2017, US$29 billion in new development is planned to open, which would increase the current number

of gaming tables by 56.3% and the number of hotel rooms by 19.5%. Slot machines would increase by 65.9% from year

end 2014 to 2017. 2016 will be another big year with Wynn Macau, Sands China Louis XIII and MGM China all expected to

open their new casino resorts in Cotai. Finally, being last to Cotai, SJM is planned to open its Lisboa Palace in 2017.

Table-5: Macau Gaming Tables, Slots Machines and Hotel Rooms, 2012-2017F

2012A 2013A 2014A 2015F 2016F 2017F

Total Growth 2014 to 2017

14-17 CAGR

Gaming Tables 5,485 5,750 5,711 6,711 8,227 8,927 56.3% 16.1% yoy Growth 3.5% 4.8% -0.7% 17.5% 22.6% 8.5%

Slot Machines 16,585 13,106 13,018 15,518 20,593 21,593 18.4% 18.4% yoy Growth 3.3% -21.0% -0.7% 19.2% 32.7% 4.9%

Casino Hotel Rooms 13,859 16,690 16,790 19,960 26,660 28,660 19.5% 19.5% yoy Growth 35.2% 20.4% 0.6% 18.9% 33.6% 7.5%

Source: Gaming Inspection and Coordination Bureau Macao SAR, Government of Macao Special Administrative Region Statistics and Census Service.

Table-6: Macau Planned Development Timeline

Expected Opening

Developer Project Name Current Status

Investment (US$ bn)

Casino Tables

Slots Hotel

Rooms

27 May 2015 Galaxy Ent. (00027 HK)

Broadway at Galaxy Macau

Under Renovation

US$1.1 0 0 320

Mid 2015

Galaxy Ent.

(00027 HK)

Galaxy Macau

Phase II

Under

Construction US$3.0 500 1,000 1,250

3Q15

Melco Crown

(MPEL US)

Studio City

(Melco Crown)

Under

Construction US$3.2 500 1,500 1,600

2015 Total Additions:

US$7.3 1,000 2,500 3,170

1H 2016

Wynn Macau (01128 HK)

Wynn Palace Under Construction

US$4.1 550 1,000 1,700

2016

Sands China (1928 HK)

The Parisian Macao (Sands)

Under Construction

US$2.7 350-450 2,500 3,300

Mid 2016 Louis XIII Hds. (00577 HK)

Louis XIII Under Construction

US$1.0 66 75 200

Fall 2016

Mgm China (02282 HK)

MGM Cotai Under Construction

US$2.9 500 1,500 1,500


US$10.7 1,516 5,075 6,700


SJM Hds. (00880 HK)

Lisboa Palace (SJM)

Under construction

US$3.9 700 1,000 2,000

Not Set

Galaxy Ent. (00027 HK)

Galaxy Macau Phases 3 & 4

Site investigation

US$6.4-US$7.7 90 270 3,500

Total Additions:

US$29.0 3,306 8,845 15,370

Source: Guotai Junan International, the companies: Wynn Macau (01128 HK), MGM China (02282.HK), Sands China (01928 HK), SJM (00880 HK), Galaxy

Entertainment (00027 HK), Louis XIII Hds. (00577 HK) and Melco Crown Entertainment (06883 HK). Note*:Galaxy Macau Phases 3 & 4 gaming tables, slot machines and hotel rooms are Guotai Junan International estimates.

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


Table-7: Macau Total Number of Casinos by Company, 2012-2017F

Operators 2012 2013 2014 2015F 2016F 2017F

S.J.M. (00880 HK) 20 20 20 20 20 21

Sands China (01928 HK) 4 4 4 4 5 5

Galaxy (00027 HK) 6 6 6 7 7 7

Wynn Macau (01128 HK) 1 1 1 1 2 2

Melco Crown (06883 HK) 3 3 3 4 4 4

MGM China (02282 HK) 1 1 1 1 2 2

Louis III Holdings 0 0 0 0 1 1

TOTAL 35 35 35 37 41 42 Source: Gaming Inspection and Coordination Bureau Macao SAR.

Casino hotel room supply to increase by 18.9% in 2015, alleviating a

major growth bottleneck. With virtually no increase in casino hotel room

supply in 2014, occupancy rates at casino hotels remained at near full

capacity in 2014. For each of Wynn Macau, Galaxy Macau, MGM China and

Melco Crown, casino occupancy rates were all above 95% in each of the

first three quarters of 2014. Even the occupancy laggard, SJM, had a very

high occupancy rate of over 90% in 3Q14. The new casino hotel room

capacity to be added this year will allow more overnight visitors, and will

allow overnight visitors to stay longer. We believe this, combined with the

additional gaming capacity, will be a key driver for Macau gaming revenue.

Figure-15: Macau Occupancy Rates for

the 6 Casino Operators

Source: Bloomberg, Guotai Junan International.

Note*: Guotai Junan International estimates for SJM.

Challenges & Risks

The Macau government is making plans to cap the number of mainland tourists to control traffic congestion and

overcrowding. According to Macau’s Secretary for Social Affairs and Culture, some Macau residents are not happy about

overcrowding and traffic congestion caused by mainland visitors, and the Macau government plans to soon discuss the issue

with mainland’s central government. It has been reported in the local media that there has been discontent among some of the

locals about the number of visitors, many from mainland China, causing congestion in some parts of the city, especially during

peak travel seasons. No cap has yet been decided and limits could vary for different seasons of the year. As a result, there

could be new limitations on visas for mainlanders to Macau.

We expect Beijing’s low GDP and M2 growth targets for 2015 will have a negative effect on Macau GGR. Beijing sets

China’s 2015 GDP growth target at 7.0%, lowest target in over 15 year. M2 growth for 2015 has been targeted at just 12%,

which is lower than last year’s target of 13% and suggests there’s no plan for big stimulus this year. During the National

People's Congress in early March, Premier Li Keqiang said that China’s economy would face even more formidable difficulties

this year than in 2014.

Table-8: Beijing’s Targeted GDP and M2 Growth, 2010-2015

2010 2011 2012 2013 2014 2015

GDP yoy (%)

Target 8.0 8.0 7.5 7.5 7.5 7

Actual 10.4 9.3 7.7 7.4 7.4

M2 Money Supply yoy (%)

Target 17.0 16.0 14.0 13.0 13.0 12

Actual 19.7 13.6 13.8 13.6 12.2

Source: National People’s Congress, National Bureau of Statistics of China, Guotai Junan International.

80

85

90

95

100

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14

Wynn Macau Sands ChinaGalaxy Macau Melco Crown Ent.MGM China SJM*

%

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


No end in sight to China’s intensifying anti-corruption campaign. The fifth plenary session of the Communist Party of

China's Central Commission for Discipline Inspection (CCDI) concluded on January 14. At the plenary session, Wang Qishan,

a member of the 7-man Politburo Standing Committee as well as the secretary of the CCDI, made a presentation of the work

report "Rule of Law in Accordance with Regulations Governing Party to Unswervingly Promote Clean Government and

Combat Corruption". The work report was passed by the CCDI’s 125 members and sets as targeting senior officials, state

firms and fugitives abroad as the 2015 anti-graft priorities. On January 13, Premier Xi Jinping delivered a speech at the

plenary session emphasizing the need to actively expand and deepen the fight against corruption. Xi pointed out that although

the anti-corruption campaign made considerable progress in 2014, the government must further push forward its battle

against corruption comprehensively and leaving nothing off limits in order to foster an environment where officials don’t even

dare or want to engage in corruption. During the NPC / CPPCC joint session in Beijing in early March, Premier Li Keqiang said

that “our tough stance on corruption is here to stay… our tolerance for corruption is zero.”

October 6, 2014 smoking ban is negatively impacting GGR. Under the current smoking ban, which went into effect on

October 6, 2014, smoking is allowed only in private VIP gaming rooms and on the main gaming floor in enclosed smoking

rooms that do not contain any gaming tables or slot machines (electronic cigarettes, however, are not restricted). In their 4Q14

earnings call, Melco Crown (MPEL US) indicated that the smoking ban is reducing the average time that smokers play, since

they have to stop gambling and go to a smoking lounge every time they want to smoke, and less time spent gambling has a

direct negative impact on gaming revenue. I think this phenomenon applies to all Macau casinos and not just to Melco Crown.

Full smoking ban likely to be passed by 2016 would include an end to smoking in casino VIP rooms and the removal

of existing airport-style enclosed smoking lounges. Macau’s Secretary for Social Affairs and Culture announced that the

government would propose a bill that would fully ban smoking inside casinos, including VIP rooms. The bill is not likely to be

passed until after Aug. 15, if passed at all, and would include stiffer fines for individuals smoking in banned areas (currently

the fine ranges from MOP400 to MOP600). The proposed new ban would mean that smoking would no longer be allowed

anywhere in the casinos and would have a detrimental effect on total gaming revenue. During Wynn Macau (01128 HK)’s

4Q14 earnings call, chairman Stephen Wynn indicated that he believes the bill will eventually be passed. On January 27,

Macau’s largest labour group, the Macau Federation of Trade Unions announced that it would petition the government to ban

smoking from VIP rooms and end smoking lounges on mass casino floors. According to www.ggrasia.com, Tang Chi Ho,

director of the Tobacco Prevention and Control Office of Macau’s Health Bureau said that a full ban on smoking in all casinos

is likely by 2016. The ban is expected to include an end to smoking in Macau casino VIP rooms and the removal of existing

airport-style enclosed smoking lounges.

We think the continued crackdown on illegal use of China UnionPay in Macau will have limited impact on GGR; in

2014, illegal use of China UnionPay in Macau amounted to MOP784 million (US$98.2 million), which is equivalent to

just 0.2% of Macau’s total 2014 GGR. The Macau government continues to crack down on illegal use of unregistered China

UnionPay terminals. Mainlanders are only allowed to take a daily limit of RMB20,000 (US$3,188) out of mainland China in

cash. Gamblers routinely circumvent this by buying jewellery and watches in Macau with UnionPay and immediately returning

the goods for MOP cash which they can use for gambling; this transaction is not illegal as long as the UnionPay terminal is

registered in Macau. However, it is illegal if the UnionPay terminal is “unregistered” (unregistered in Macau but instead

registered in mainland China). These registered in mainland China terminals are illegally smuggled into Macau, allowing

payments to be recorded as domestic transactions within the PRC, therefore being charged lower fees.

With the crackdown on illegal use of China UnionPay, VIP and premium mass gamblers can continue to use junket

credit and mass gamblers can continue to use the legally registered UnionPay terminals. There is usually a 3% to 5%

fee for using UnionPay in Macau, making it an expensive option for transferring a large amount of money out of China. A

cheaper and more convenient way is to borrow MOP in Macau from junkets and then settle up in RMB after returning to

mainland, thereby avoiding the need to transfer cash into Macau. Of course, this method only applies to VIP and premium

mass gamblers.

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


Macau Gross Gaming Revenue

In 2013, Macau GGR per P.R. China national was equivalent to just 15.8% of U.S. GGR per U.S. national. Macau’s 2013

GGR (US$45.2 bn) was 6.9 times that of the Las Vegas Strip (US$6.5 bn) but equivalent to just 67.7% of total U.S. gaming

revenue (US$66.7 bn); we think this implies further growth potential for Macau. To get an idea of growth potential, we look at

total gaming revenues in the U.S. and Macau divided by the total populations of the U.S. and the PRC. We find that in 2013,

the U.S. had US$210 in gaming revenue per U.S. person; in Macau, there was US$33 in gaming revenue per PRC person,

equivalent to just 15.8% of the U.S figure. Of course this is not an apples-to-apples comparison since the U.S. has local

casinos throughout the country (compared with PRC where casinos are legal only in Macau) and higher disposable incomes

per capita. Still, we think it is an indicator that there is further growth potential in Macau’s gaming sector. However, while hotel

room supply and travel infrastructure (bridges, border crossing, Macau intercity travel, etc.) continue to improve in Macau, they

will always force a cap on Macau’s GGR growth potential.

Macau’s total GGR declined by 2.6% in 2014, the first decline since the industry’s opening up in 2002. However, there

was a huge difference between the VIP and Mass Market segments, and also between the first quarter and the last three

quarters.

With the central government’s ongoing anti-corruption campaign, Macau’s VIP GGR fell by 10.9% in 2014. Sequentially,

VIP GGR showed qoq declines in the first two quarters followed by positive qoq growth in 3Q14 and 4Q14. The 2014 drop in

VIP GGR was the second year with negative growth since the sector’s opening up in 2002, the first being in 2005 when VIP

GGR declined by just 3.1%. The VIP segment suffered through 2014 as the Chinese government continued and even

accelerated its anti-corruption campaign, which we expect to continue indefinitely with no let up in sight. With the plunge in

VIP GGR, the number of licensed junkets (gaming promoters) in Macau decreased by 15.6% in 2014. The total number of

junkets fell from 217 in January 2014 to just 183 by year end, according to public broadcaster Rádio Macau.

Mass market GGR increased by 13.7% for full year 2014, but declined qoq from 2Q14 through 4Q14. Factors negatively

affecting the mass segment were China’s slowing GDP growth along with virtually no new gaming or casino hotel room

capacity in 2014. In addition, the premium mass segment suffered along with the VIP segment. 4Q14 was a disaster for the

mass segment when its GGR plunged by 18.2% qoq, the steepest drop on record going back to 1Q05.

Figure-16: Macau Total, VIP and Mass GGR Growth

(Annual)

Figure-17: Macau Total, VIP and Mass GGR qoq Growth

(Quarterly)

Source: Gaming Inspection and Coordination Bureau of Macao SAR. Source: Gaming Inspection and Coordination Bureau of Macao SAR.

Macau’s GGR was up 2.0% mom in January 2015, but hopes that the sector had bottomed out were dashed in

February when GGR crashed 17.7% mom. February’s mom plunge was especially bad, considering that it was the month of

the Chinese New Year. From 2008 to 2014, GGR has on average increased by 6.4% mom in the month of the Chinese New

Year. February GGR was the lowest it’s been since January 2011, when GGR was MOP18,571 million.

57.8% 42.2%

13.5% 18.6%

-2.6%

33.3%

36.1%

30.0% 31.0%

13.7%

69.9%

44.6%

7.5%13.1%

-10.9%-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2010 2011 2012 2013 2014

Total Gross Gaming Revenue GrowthMass Market Gaming Revenue GrowthVIP Market Gaming Revenue Growth

5.7%

2.4%

11.6%

12.2%

5.4%

-2.4%

-0.4%

-18.2%

0.3%

-16.0%-14.4%

-1.5%

-19.6%

-7.2%

2.0%4.1%5.5%

1.0%

3.5%

12.3%

2.1%

-11.1%-8.8% -8.8%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14

Mass Market Gaming Revenue Growth (qoq)VIP Market Gaming Revenue Growth (qoq)Total Gross Gaming Revenue Growth (qoq)

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


Figure-18: Macau Total, VIP and Mass GGR Growth

(Annual)

Figure-19: Macau Total, VIP and Mass GGR qoq Growth

(Quarterly)

Source: Gaming Inspection and Coordination Bureau of Macao SAR. Source: Gaming Inspection and Coordination Bureau of Macao SAR.

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

-

5

10

15

20

25

30

35

40

No

v/0

8

Ap

r/09

Sep

/09

Feb/1

0

Jul/10

Dec/1

0

May/…

Oct/11

Mar/

12

Aug

/12

Jan

/13

Jun

/13

No

v/1

3

Ap

r/14

Sep

/14

Feb/1

5

GGR (L) YoY (R) MoM (R)

HK$ Billion

-60%-50%-40%-30%-20%-10%0%10%20%30%40%50%

-

5

10

15

20

25

30

35

40

GGR (L) YoY (R) MoM (R)

HK$ Billion

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


Our 2015 Macau GGR Forecasts

We forecast Macau GGR qoq growth for 1Q15 to 4Q15 of -16.9%, -4.0%, 5.7% and 8.1%, respectively; this works out

to a 2015 full year decline of 27.2%. With the Chinese government’s ongoing and intensifying anti-corruption campaign, low

GDP and M2 growth targets from Beijing, likely expansion of the smoking ban and likely cap on the number of mainland

visitors, we except Macau GGR growth to continue to be under pressure sequentially throughout 2015, showing flat

sequential growth except for when new casino hotel room or gaming table capacity is added.

Our 1Q15 qoq GGR growth forecast of -16.9% is equivalent to a 38.5% yoy decline due to high comparison base in

1Q14. Macau GGR hit its all time high in 1Q14 of HK$99.2 billion, making for a tough comp in 1Q15. Combined 2015 Jan. and

Feb. GGR declined 35.1% yoy and we are forecasting flat qoq growth for March.

Our 2Q15 qoq GGR growth forecast of -4.0% is equivalent to a 33.6% yoy decline due to high comparison base in

2Q14. US$2.5 billion Galaxy Macau Phase II is expected to add 500 gaming tables, 1,000 slot machines and 1,250 five-star

hotel rooms on May 27, 2015. This translates to a 9.4% increase in Macau’s casino hotel room supply and an 8.8% increase

in Macau’s total gaming table capacity, which we expect to attract more gamblers to Macau, driving GGR gains. However, the

new capacity will only be open for a portion of 2Q15.

Our 3Q15 qoq GGR growth forecast of 5.7% is equivalent to a 23.0% yoy decline. Growth will benefit qoq as Galaxy

Macau Phase II will be open for the full 3Q as opposed to being open for just a fraction of 2Q.

Our 4Q15 qoq GGR growth forecast of 8.1% is equivalent to an 8.8% yoy decline. Melco Crown will open its Studio City

sometime in 3Q15 with around 500 gaming tables and 1,600 rooms (I assume it does not open until the end of 3Q15). This

translates to an 8.7% increase in Macau’s casino hotel room supply and an 8.1% increase in Macau’s total gaming table

capacity on top of the already higher capacity from Galaxy Macau Phase II.

Figure-20: Macau Total GGR Growth (qoq) Figure-21: Macau VIP and Mass GGR Growth (qoq)

Source: Gaming Inspection and Coordination Bureau of Macao SAR, Guotai

Junan International.

Source: Gaming Inspection and Coordination Bureau of Macao SAR, Guotai

Junan International.

2.1%

-11.1%-8.8% -8.8%

-16.9%

-4.0%

5.7%8.1%

-20%

-15%

-10%

-5%

0%

5%

10%

1Q14 2Q14 3Q14 4Q14 1Q15F2Q15F3Q15F4Q15F

Total Gross Gaming Revenue Growth (qoq)

5.4%

-2.4%-0.4%

-18.2%

-12.6%

0.7%

10.6%12.8%

0.3%

-16.0%-14.4%

-1.5%

-19.6%

-7.2%

2.0%4.1%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

1Q14 2Q14 3Q14 4Q14 1Q15F2Q15F3Q15F4Q15F

Mass Market Gaming Revenue Growth (qoq)

VIP Market Gaming Revenue Growth (qoq)

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


APPENDIX

Macau Gaming Historical Development

Macau, the only jurisdiction in P.R. China where casinos are allowed, has more casinos than any other region in Asia

and has been the world’s largest gaming destination in terms of gross gaming revenue since 2006. The Macau Special

Administrative Region of the PRC, with total area of only 28.2 sq km, was established on 20 December 1999 after more than

400 years of Portuguese administration. Located on the western side of the Pearl River Delta, 60 km across from Hong Kong

to the east, bordered by Zhuhai in Guangdong province to the north and facing the South China Sea to the east and south,

Macau is the only area in China where casinos are allowed by the government.

STDM monopolized gaming from 1962 to 2002. Gaming was formally legalized in Macau in 1847. By the 1850s, there were

more than two hundred “Fantan” stalls operating in Macau. By the late 19th century, gaming tax had already become the

government’s main source of income. In 1930, “Hou Heng Company” won Macau’s first casino gaming monopoly concession,

which was subsequently granted to “Tai Heng Company” in 1937 and expired at the end of 1961, when the concession

became open for public bidding. With only the incumbent “Tai Heng Company” and a new company, Sociedade de Turismo e

Diversões de Macao (STDM), bidding, STDM won the bidding and obtained the monopoly concession in 1962. For the next

40 years, STDM monopolized Macao’s gaming market.

In 2012, 88% of Macau’s GDP and 83% of Macau’s total public revenue came from gaming revenue. The government

will collect about MOP140 billion (US$17.5 billion) in taxes and other levies on gaming in 2013, according to calculations by

the Portuguese news agency Lusa using data for the 12 months ended on November 30. Lusa forecasts that the 35 percent

direct tax on gross gaming revenue will bring in about MOP124.4 billion and other indirect taxes will bring in about MOP14.2

billion. Additionally, casino operators paid around MOP1 Bn in licensing fees for gambling tables and slot machines in 2013.

Macau casinos are in the Macau Peninsula and Cotai. Macau consists of four segments: 1) the Peninsula (9.3 sq. km) in

the North, which borders Zhuhai, China; the Southern “islands” of 2) Taipa and 3) Coloane, which aren’t really separate

islands anymore since they are unified by 4) Cotai (5.6 sq. km.), the reclamation area connecting the two “islands”. Three

bridges link the Peninsula to Taipa. Macau’s casinos are all in the Peninsula, the historical gaming center, and Cotai, the new

gaming center still under development.

Figure-1: Macau Geography

Source: Globe-trotter macao-map.svg.

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


Macau gaming opened up with the end of STDM’s gaming monopoly in 2002. STDM’s concession expired on 31

December 2001, and Macao had decided to grant out three gaming concessions in an open bidding process in order to further

the development of the industry. There were a total of 21 bidding proposals received, out of which concessions were granted

to Sociedade de Jogos de Macau (“SJM” 00880 HK, a subsidiary of STDM), Galaxy Casino, S.A., and Wynn Resorts (Macao)

S.A. in February 2002. Macau subsequently permitted each of Galaxy, SJM and Wynn Macau to grant sub-concessions to

MGM Grand Paradise S.A. (in April 2005), Venetian Macao S.A. (in Dec. 2002) and Melco Crown Jogos (Macau) S.A. (in Sept.

2006), respectively. Currently, there are a total of six concession/sub-concession holders: SJM Holdings (00880 HK), Galaxy

Entertainment (00027 HK), Wynn Macau (01128 HK), Sands China (01928 HK), MGM China (02282 HK) and Melco Crown

Entertainment (06883 HK and MPEL US).

Table-1: Macau Casino Timeline History

1847 Portuguese colonial government legalizes gambling in Macau.

1930 The Hou Heng Company wins a monopoly concession for operating all games of chance.

1937 Casino monopoly awarded to Tai Heng Company, which introduces baccarat to Macau.

1962 Macau government awards monopoly concession to Sociedade de Turismo e Diversões de Macao (STDM).

1970 Casino Lisboa (STDM) opens.

2002 Casino gaming concession awarded to Sociedade de Jogos de Macau, which is now owned by SJM Holdings (“SJM” 00880 HK).

2002 Casino gaming concession awarded to Galaxy Casino, S.A., which is now owned by Galaxy Entertainment (“Galaxy” 00027 HK).

2002 Casino gaming concession awarded to Wynn Resorts (Macao) S.A., which is now owned by Wynn Macau (01128 HK).

2002 Galaxy permitted to sell sub-concession to Venetian Macao S.A., which is now owned by Sands China (01928 HK).

2004 Sands Macao opens, the first American-run casino in Macao.

2004 Galaxy Entertainment opens its first casino, Galaxy Waldo.

2005 SJM sells sub-concession to MGM Grand Paradise, which is now owned by MGM China (02282 HK).

2006 Wynn sells sub-concession to Melco PBL (currently Melco Crown Gaming), now owned by Melco Crown Ent. (06883 HK and MPEL

US).

2006 Melco Crown Entertainment acquires Mocha slot lounges.

2006 Grand Waldo (Galaxy Entertainment) opens.

2006 Wynn Macau opens.

2007 Melco Crown Entertainment opens Crown Casino (now Casino Altira).

2007 MGM Grand Macau opens.

2007 Grand Lisboa casino opens (SJM).

2007 Venetian Macao (Sands China) opens.

2009 City of Dreams (Melco Crown Entertainment) opens.

2010 Encore Macau (Wynn Macau) opens.

2012 Sands Cotai Central Phase I opens in April 2012

2012 Sands Cotai Central Phase II A opens in September 2012,

2013 Sands Cotai Central Phase II B opens in January 28, 2013,

2014 No new casinos opened. Source: University of Las Vegas Center for Gaming Research, the Companies, Guotai Junan International.

Macau (sort of) limits number of casino table additions through 2023 to total of 1,400 (7,150 total tables in operation).

Since 2012, the Macao Gaming Inspection and Coordination Bureau has set a table cap on the total number of casino gaming

tables allowed in Macao. Each of the six casino concessionaires is allotted a certain fixed amount of tables, and must get

approval to add more tables. However, the cap has proven to be flexible, since the total table cap was set at 5,500 through the

end of 2013, when in actuality the number of tables increased to 5,750. The cap will expand by 1,400 tables to 7,150 tables by

2023. The incremental cap is set to be liberally applied such that new tables will be allotted from the total number that will

accrue by 2023 rather than be strictly rolled at fixed quantities per year that could hold back the opening of new casinos.

Casinos are finding ways to circumvent the table cap. For example, double-tables (or ‘Siamese’ baccarat tables) feature

two dealers handling twice the normal number of players, but because each dealer uses a common drop box, it only counts as

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


a single table. Another is ‘Fast Action Baccarat’ (FAB) tables. The seven-meter-long, three-meter-wide, semi-automated FAB

tables feature 28 betting stations capable of handling up to 60 players simultaneously. Operators can also decrease the

number of tables at old casinos to make room for more tables at new casinos. Planned development through 2018 (see next

paragraph) would add ~3,770 new tables, far surpassing the 1,400 table addition limit. However, I think that as long as the

industry supply-demand balance is healthy, bureaucrats will be flexible with enforcement of the cap rule. Moreover, casino

operators will find ways to circumvent it.

Figure-2: “Siamese” Baccarat Table

Source: www.gamingfloor.biz.

13

Ma

rch

20

15

G

am

ing S

ecto

r 博

彩

Se

cto

r R

ep

ort


Company Rating Definition

The Benchmark: Hong Kong Hang Seng Index

Time Horizon: 6 to 18 months

Rating Definition

Buy Relative Performance >15%; or the fundamental outlook of the company or sector is favorable.

Accumulate Relative Performance is 5% to 15%;

or the fundamental outlook of the company or sector is favorable.

Neutral Relative Performance is -5% to 5%; or the fundamental outlook of the company or sector is neutral.

Reduce Relative Performance is -5% to -15%;

or the fundamental outlook of the company or sector is unfavorable.

Sell Relative Performance <-15%; or the fundamental outlook of the company or sector is unfavorable.

Sector Rating Definition

The Benchmark: Hong Kong Hang Seng Index

Time Horizon: 6 to 18 months

Rating Definition

Outperform Relative Performance >5%; or the fundamental outlook of the sector is favorable.

Neutral Relative Performance is -5% to 5%; or the fundamental outlook of the sector is neutral.

Underperform Relative Performance <-5%; or the fundamental outlook of the sector is unfavorable.

DISCLOSURE OF INTERESTS

(1) The Analysts and their associates do not serve as an officer of the issuer mentioned in this Research Report. (2) The Analysts and their associates do not have any financial interests in relation to the issuer mentioned in this Research Report.

(3) Except for Shandong Chenming Paper Holdings Limited-H shares (01812), China All Access (Holdings) Limited (00633), Guangshen Railway Company Limited-H shares (00525), Guotai Junan International Holdings Limited (01788) and Binhai Investment Company Limited (02886), Guotai Junan and its group companies do not hold equal to or more than 1% of the market capitalization of the issuer

mentioned in this Research Report. (4) Guotai Junan and its group companies have not had investment banking relationships with MGM China (02282 HK) / Galaxy

Entertainment (00027 HK) / Wynn Macau (01128 HK) / Melco Crown Entertainment (MPEL US) / SJM Holdings (00880 HK) / Sands

China (01928 HK) mentioned in this Research Report within the preceding 12 months.

DISCLAIMER This Research Report does not constitute an invitation or offer to acquire, purchase or subscribe for securities by Guotai Junan Securities

(Hong Kong) Limited ("Guotai Junan"). Guotai Junan and its group companies may do business that relates to companies covered in research reports, including investment banking, investment services and etc. (for example, the placing agent, lead manager, sponsor, underwriter or invest proprietarily).

Any opinions expressed in this report may differ or be contrary to opinions or investment strategies expressed orally or in written form by sales persons, dealers and other professional executives of Guotai Junan group of companies. Any opinions expressed in this report may differ or

be contrary to opinions or investment decisions made by the asset management and investment banking groups of Guotai Junan. Though best effort has been made to ensure the accuracy of the information and data contained in this Research Report, Guotai Junan does

not guarantee the accuracy and completeness of the information and data herein. This Research Report may contain some forward-looking estimates and forecasts derived from the assumptions of the future political and economic conditions with inherently unpredic table and mutable situation, so uncertainty may contain. Investors should understand and comprehend the investment objectives and its related risks,

and where necessary consult their own financial advisers prior to any investment decision. This Research Report is not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located

in any jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation or which would subject Guotai Junan and its group companies to any registration or licensing requirement within such jurisdiction.

© 2015 Guotai Junan Securities (Hong Kong) Limited. All Rights Reserved. 27/F., Low Block, Grand Millennium Plaza, 181 Queen’s Road Central, Hong Kong.

Tel.: (852) 2509-9118 Fax: (852) 2509-7793 Website: www.gtja.com.hk

SJM Sector Report: Gaming Wynn Macau Melco Crown MGM …

Documents

Transcript of SJM Sector Report: Gaming Wynn Macau Melco Crown MGM …