Union Gaming Research publishes company research and analysis on the global gaming industry. Our research analysts continually identify and analyze financial information and trends that affect the industry.
Year
Topic
- All
- Acquisition
- Ameristar Casinos
- Aristocrat Leisure
- Atlantic City
- Bally Technologies
- Boyd Gaming
- Caesars Entertainment
- Cambodia
- Cosmopolitan
- Cotai
- Downtown Las Vegas
- Financing
- Galaxy Entertainment
- Genting Singapore
- Golden Week
- Illinois
- Indiana
- International Game Tech
- Isle of Capri Casinos
- Japan
- Lake Tahoe
- Las Vegas Locals
- Las Vegas Sands
- Las Vegas Strip
- Laughlin
- Macau
- macau
- Marina Bay Sands
- Maryland
- Massachusetts
- Melco Crown
- MGM China
- MGM Resorts
- NagaCorp
- Ohio
- Online Poker
- Ontario
- Pagcor
- Penn National Gaming
- Philippines
- Pinnacle Entertainment
- Reno
- Sands China
- Short Interest
- Shuffle Master
- Singapore
- SJM Holdings
- Slot machines
- Station Casinos
- Table games
- Toronto
- Vietnam
- WMS Industries
- Wynn Macau
- Wynn Resorts
Search Within
LV Strip February gaming revenues +31.2%
April 10 2013
This morning, the Nevada Gaming Control Board reported February 2013 gaming revenues. Las Vegas Strip gaming win was up 31.2% to $696.1mm, against a modest comp (+3.3%). The strength in the February numbers was driven by the combination of strong play, some good luck at the baccarat tables and the timing of Chinese New Year, which began on February 10th this year vs. January 23rd last year. Looking at the first two months of the year collectively, the Las Vegas Strip was up 4.2% to $1.2bn.
Las Vegas Sands (LVS): Announces notable special dividend, plenty of growth capital remains
November 26 2012
After the close, Las Vegas Sands announced a special dividend of $2.75 per share. The special dividend will be payable on December 18 to shareholders of record on December 10, 2012. Notably, the press release states that returning capital to shareholders will remain a priority for the company. Recall, concurrently with its 3Q12 earnings release LVS announced it was increasing its quarterly dividend by 40% ($1.40 annually) beginning in 2013.
We estimate the special dividend from a cash perspective will be $2.3bn. The company ended the 3Q12 with $3.8bn in cash on the balance sheet, which will leave the company with roughly $1.5bn in cash. From a leverage perspective, we expect net debt to LTM EBITDA to increase to 2.1x from 1.5x. This is well below other gaming operators in our coverage universe. Note, the release doesn’t specify which of the entities (Sands China, Singapore, US, Corporate) the cash was coming from. In 2013, LVS will have an estimated $1.5bn in capital expenditures and we expect the company to generate nearly $2.4bn in free cash flow. In terms of the debt maturity schedule, there is only $98mm coming due in 2013, essentially a drop in the bucket given the current cash on hand and significant free cash flow generation in 2013. For CEO Sheldon Adelson, we estimate the special dividend will net him nearly $1.2bn.
Our long-term thesis on LVS remains unchanged. LVS is particularly suited to capitalize on the explosive growth in Asia, and heralds great optionality to major jurisdictional gaming expansion given its enviable balance sheet and development/operations resume. Following the payment, LVS still has a solid balance sheet and we don’t have any concerns over LVS’s ability to meet upcoming capital expenditures or debt obligations. We maintain our Buy rating and $55 price target.
Las Vegas Sands (LVS): 3Q12 Earnings Recap; Maintain Buy Rating, PT $55
November 01 2012
Las Vegas Sands 3Q12 results were light versus the Street and our expectations on both the top-line and EBITDA. Low hold in Singapore was a major contributing factor and overall operational results were relatively in-line. Unlucky play at the tables (against LVS) cost the company nearly $75mm in EBITDA. The hold issue was largely confined to Marina Bay Sands, as Las Vegas operations benefitted from higher than normal hold. LVS reported 3Q12 property EBITDA of $876.9mm, which missed Street consensus estimates by $76.1mm and our estimate by $88.4mm. The miss was largely attributable to the Marina Bay Sands as EBITDA of $260.8mm missed the Street by roughly $150mm and our estimate by $142mm. That said, low hold at the property cost the casino roughly $105mm in EBITDA. In Macau, the Venetian Macau came in ahead of expectations, Sands Macau was roughly in-line, Cotai Central and Four Seasons were shy of forecasts. Domestically, Las Vegas was ahead of expectations benefitting from high-hold. Finally, Sands Bethworks had a strong quarter as its table business has been a strong performer.
Las Vegas Sands (LVS): 2Q12 recap; lowering estimates
July 26 2012
LVS 2Q12 recap - Results were well below expectations for revenues and EBITDA, and the miss was across the portfolio, although more concentrated in Singapore. That said, bad hold, which is an inherent risk in the gaming industry, notably impacted results. LVS reported 2Q12 property EBITDA of $845mm, which missed Street consensus estimates by $100mm. The miss was largely attributable to Marina Bay Sands, which reported EBITDA of $330mm versus consensus of $425mm.The property played unlucky at the tables and hold-adjusted EBITDA would have been $388mm. We are lowering EBITDA estimates for this year and next by 9% and 6%, respectively. We are not deterred by transitory hold issues, single segment demand volatility in the nascent Singapore market, nor slower VIP growth that is already discounted in Macau. We are buyers of LVS shares on related weakness, particularly at the mid-$30 level. Valuation now replicates regional U.S. casino operators, and with single asset transactions already executed at premiums to these valuation levels there is frankly no debate in our view.
In Singapore, we continue to get the impression of a slightly manic VIP customer, with limited visibility beyond a few week time period. It appears to us that these customers’ trips to MBS, especially those domiciled in SE Asia (Singapore, Malaysia, Indonesia), are influenced by the gyrations of regional equity markets (we note Singapore and HK equity market declines of ~5% during the quarter). With this in mind, we would continue to expect some weakness in VIP volume over the near-term for both Singapore operators.
Las Vegas Sands (LVS): Four Seasons Macao apartments update; we est. $900mm in proceeds
June 04 2012
SCL drops Site 7/8; we think receives Site 3 and apartments in return - Last week Sands China dropped its ongoing appeal and legal claim to Sites 7/8 (located immediately south of Sands Cotai Central), on which SCL has spent ~US$100mm on construction-related items. In return, we believe the government might soon approve significant items for SCL, such as: SCL’s sought-after Site 3 construction extension (and perhaps a related labor quota); and / or the ability for SCL to finally sell its luxury apartments at the Four Seasons.
Impact to SCL and LVS - For SCL, net proceeds (pre-tax) of HK$6.4bn to 7.0bn, amount to HK$0.79 to 0.87 per share. If proceeds were to be paid out in the form of a dividend, LVS could receive approximately US$577mm to 632mm, or US$0.70 to 0.77 per share.
Las Vegas Sands (LVS): 1Q12 recap; solid quarter and taking numbers up
April 25 2012
LVS 1Q12 recap - In 1Q12, LVS reported total net revenues of $2.76bn (+30.8% versus $2.11bn y/y), EBITDA (post corporate expense) of $1.01bn and adj. EPS of $0.70. This compares to the Street estimate for revenues of $2.65bn, EBITDA (post corporate expense) of $914mm and adj. EPS of $0.60. Total company EBITDA margins increased 330bps to 38.6% (versus Street estimate of 36.9%). LVS reported 1Q12 property EBITDA of $1.07bn, which exceeded Street consensus estimate by $94mm. The beat was driven by strong results at Marina Bay Sands, which reported EBITDA of $473mm, ahead of Street consensus of $409mm. Results in Singapore were aided by higher hold, which we think contributed roughly $50mm in incremental EBITDA. In Macau, results were inline with Street consensus, albeit also boosted by higher hold at Sands Macao and Venetian Macao. While VIP volume at Sands Macao was down 22.2%, it was more than offset by a 220% increase in VIP volume at the Four Seasons Macao. This is attributable to the company’s shift in VIP strategy, which has a focus on the Plaza casino at the Four Seasons. In the US, Las Vegas results exceeded consensus expectations, driven by strong gaming volumes, particularly in baccarat play as well as an increase in ADR from cash rooms. All in, it was a solid quarter and we didn’t see anything in the numbers to materially alter our thesis on the LVS story.
Las Vegas Sands (LVS): Sands Cotai Central thoughts from the opening; with pictures
April 11 2012
Sands Cotai Central - thoughts from the opening - As the Cotai Strip comes together with the opening of the corridor's fifth resort complex, the placement of Sands' properties here reminds us of the early days in Laughlin and Lake Tahoe when visionaries (Don Laughlin and Bill Harrah) ultimately took disproportionate share because they designed the market and understood how traffic would flow throughout the jurisdiction. Sands Cotai Central will tie together the company's assets in Cotai via exclusive foot bridge in a way that should enable it to capture an outsized share of mass market foot traffic. The property is comfortably accessible from the Cotai Strip and its components are easily navigable. The decor is traditional Chinese which is evident in the Conrad and Holiday Inn porte-cochères, art-embedded columns throughout the casino floors, common area wall coverings and carpeting, and hotel room finishings (please see pictures in PDF). The casino floor is simply designed with sight lines from corner to corner. It is spacious and light, with high ceilings and boasts a wider variety of gaming product than is typical in Macau, which speaks to its mass market focus. Food offerings pull from concepts that are working in-market as well as provincial product that should appeal to various segments of the mass market. Retail brands are typical for the company although the mall includes a kid’s club concept which is common in Las Vegas locals properties and uncommon in Macau. This should appeal to the mass segment. Meeting square footage was stacked on the casino podium and also accessible from the retail square footage. In general the resort complex appears well contemplated and executed, and is down the middle of the fairway in order to engage MICE demand, capture additional wallet share from existing mass customers at Venetian and Sands, pull latent demand for Cotai from various junket operators, and capture "retail" gaming play on the Cotai Strip.
Singapore approves two junkets; thoughts on regional impact
March 22 2012
CRA approves two junkets for RWS - This evening, Singapore’s Casino Regulatory Authority announced that it had approved two junkets to operate at Genting Singapore’s (GENS SP) Resorts World Sentosa, representing the first such time junkets (to be known as International Marketing Agents) will be able to operate in the jurisdiction. At this point, the CRA has not yet approved any junkets who wish to operate at Las Vegas Sands’ (LVS) Marina Bay Sands. The junkets will receive one-year licenses. We note that the CRA’s language is quite forceful, suggesting licensees will be continually subjected to suitability tests upon pain of revocation. A condition of the approval is that junkets only target foreigners – suggesting that locals are off limits.
Junket commissions likely to be higher than in Macau - We believe that RWS has been paying direct player rebates of around 1.25% of rolling chip volume, which is inline with rolling chip-based junket commissions in Macau. With junkets in the mix in Singapore, we believe the commission rates paid on this incremental play could likely be an additional 20bps (junket commissions are always higher than direct player rebates). We estimate that a 20bps increase in rolling chip commission results in about a 1,000bps decline in associated EBITDA margin. As such, we would expect the impact of junkets to have a positive effect on EBITDA dollars and a negative effect on EBITDA margin.
Las Vegas Sands (LVS): 4Q11 Earnings recap; firing on all cylinders
February 01 2012
Las Vegas Sands reported impressive 4Q11 results, particularly at the company’s Macau and Singapore properties. In Las Vegas, 4Q11 earnings came in below consensus, however, we believe that this quarter’s performance is a direct result from a conscious shift in customer mix, driven by a cut back in promotions, particularly, room comps (explained in greater detail herein). Overall, the company is firing on all cylinders. We would be buyers of LVS shares on continued growth in Singapore and Macau (with few signs of a slowdown and our forecast for 20% market growth) and LVS’ ability to generate significant free cash flow, which could be used to fund an annual dividend or finance future growth opportunities.
LVS 4Q11 recap - In 4Q11, LVS reported total net revenues of $2.54bn (+26.3% versus $2.02bn y/y), EBITDAR (post corporate expense) of $898.8mm and adj. EPS of $0.57. This compares to the Street estimate for revenues of $2.47bn, EBITDAR (post corporate expense) of $884.0mm and adj. EPS of $0.57. Total company EBITDAR margins increased 110bps to 37.8% (versus Street estimate of 35.8%). 4Q11 results were driven by solid quarters in Macau (EBITDA +27.2%) and Singapore (+39.6%), albeit a bit mitigated by a weaker quarter in Las Vegas (+0.4%). It is important to note that LVS’ 4Q11 results were favorably impacted by higher hold in Singapore, which had an estimated $25mm incremental benefit to EBITDA. Using a normalized hold, we estimate MBS’ EBITDA in 4Q11 of $402mm. Lastly, LVS board members declared an annual dividend of $1.00 (payable quarterly). We believe the dividend will be recurring and could be upsized in the future based on LVS’ liquidity needs.
Las Vegas Sands (LVS): Quantifying a potential dividend; more notable for SCL than LVS
January 23 2012
Given the Sands China (1928 HK, "SCL") disclosure about a forthcoming board level dividend discussion (January 31), and management's commentary about this potential deployment of cash, we attempt to quantify a possible special dividend from Las Vegas Sands (LVS) and SCL. We navigate corporate structure and balance sheet mechanics in order to do so. Ultimately, we believe special dividends can be issued by LVS and SCL that are relatively small for LVS (USD0.25 to USD0.50 / share) and more notable for SCL (~HKD1.40).
Dividend funding mechanics - As of 3Q11 Las Vegas Sands had USD4.1bn in cash and equivalents. On August 3, 2011 the company announced its intent to redeem all of the 10% Series A Cumulative Perpetual Preferred. We estimate these shares were redeemed for USD836mm in November, following the final preferred dividend payment. Pro forma for this we estimate LVS has USD3.3bn in cash and equivalents, as follows: 1) Corporate USD185mm, 2) SCL USD1.9bn, 3) Marina Bay Sands (MBS) USD520mm, and 4) U.S. operations USD680mm (Figure 1 in attached PDF). Due to certain covenant restrictions, refinancing plans and prospective project needs, some of the cash is not likely accessible for transfer back to Corporate, and management may simply not be willing to move cash from other entities.
Las Vegas Sands (LVS): Impressive 3Q11 results; Raising estimates
October 28 2011
LVS 3Q11 recap - Las Vegas Sands reported very impressive results in 3Q11. Solid quarters in Macau and Las Vegas were overshadowed by record results at Marina Bay Sands. In 3Q11, LVS reported total net revenues of $2.41bn (+26.2% versus $1.91bn y/y), EBITDAR (post corporate expense) of $862.8mm and adj. EPS of $0.55 (see Figure 1 below). This compares to the Street estimate for revenues of $2.33bn, EBITDAR (post corporate expense) of $837.0mm and adj. EPS of $0.52. Total company EBITDAR margins increased 460 bps to 38.4% (versus Street estimate of 38.0%). The strong EBITDAR margin improvement can be attributed to the higher EBITDAR margin contribution across the board, particularly in Las Vegas (+710bps to 27.1%), Bethworks (+384bps to 23.6%) and Singapore (+250bps to 52.2%). LVS’s 3Q11 results were impacted by low hold in Macau and Singapore, which would have contributed estimated incremental EBITDA of $37mm. We would be buyers of LVS shares on continued growth in Singapore and Macau (with little to no signs of an anticipated slowdown), as well as improving Las Vegas results.
Las Vegas Sands (LVS): 2Q11 results recap and read-through
July 27 2011
Las Vegas Sands reported very impressive all-around results in 2Q11. Solid quarter in Las Vegas was overshadowed by record numbers at Sands’ Macau and Singapore properties. In 2Q11, LVS reported total net revenues of $2.35bn (+47.1% versus $1.59bn y/y), EBITDAR (post corporate expense) of $852.4mm and adj. EPS of $0.54 (see Figure 1 in the attached PDF). This compares to Street estimate for revenues of $2.21bn, EBITDAR (post corporate expense) of $761.9mm and adj. EPS of $0.44. Total company EBITDAR margins increased 880 bps to 38.4% (versus Street estimate of 35.7%). The strong EBITDAR margin improvement can be attributed to the higher margin EBITDAR contribution from Singapore (+55.0% margin) as well as strong margin improvements at LVS’ Macau properties (+310bps combined), Las Vegas (+400bps)and Sands Bethlehem (+400bps), which benefitted from the addition of table games. We would be buyers of LVS shares on expected continued strength in Singapore and Macau in the coming quarters as well as improving Las Vegas results.
Las Vegas Strip: Carpe Diem
July 20 2011
Given a definitively favorable supply scenario in the Las Vegas Strip corridor over the next several years, we set out to forecast citywide occupancy, and to better understand the direction and magnitude of room rates - critical earnings levers for casino operators. With a lower limit of negative 2.3% cumulative supply (a contraction) through 2015 and an upper limit of +7.3%, coupled with historically normal visitation growth, we believe that Las Vegas will experience unprecedented occupancy levels and notably higher room rates. We don't believe this likelihood is discounted in the valuations of Boyd Gaming (BYD), Caesars Entertainment, Las Vegas Sands (LVS), MGM Resorts (MGM), nor Wynn Resorts (WYNN).
Macau mass market continues to grow; April visitation up 11%
May 23 2011
Macau visitation up 11% in April - Macau released April visitation data today, noting that visitor arrivals increased 10.7% in April, to 2.3mm persons. The comp was +13.1%. April 2011 enjoyed the benefit of one additional weekend day as compared to 2010 (10 vs. 9). April 2011 also benefited from an early start to the typical May 1 Labor Day holiday, which began this year on April 30. Visitation has grown sequentially (on both an absolute and percentage basis) in each month this year and is up 6.6% on a YTD basis against a +12.4% comp.
SJM & LVS have most mass market exposure, Galaxy up-and-coming - The biggest beneficiaries of mass market growth are SJM and LVS/Sands China. We estimate that in 1Q11, SJM had roughly a 35% share of the mass market (by revenue) and LVS/Sands China a 27% share. We also believe that Galaxy Macau is opening at precisely the right time to capture this mass market strength and what we believe will be continued mass market growth over the short, medium and longer terms driven by the one-two-three punch of wealth generation in China, ease of access to Macau (numerous infrastructure projects) and increased penetration of Chinese consumers.
Las Vegas Sands (LVS): 1Q11 results recap
May 04 2011
LVS 1Q11 recap - In our opinion, Las Vegas Sands strong top-line results were overshadowed by low hold in Singapore and Las Vegas properties. In 1Q11, LVS reported total net revenues of $2.11bn (+58.2% versus $1.33bn y/y), EBITDAR (post corporate expense) of $699.9bn and adj. EPS of $0.37. This compares to our estimate of revenues of $2.21bn (vs. $2.14bn Street), EBITDAR (post corporate expense) of $727.4bn (vs. $743.9mm Street) and adj. EPS of $0.44 (vs. $0.44 Street). We estimate low hold in Singapore and Las Vegas impacted 1Q11 EBITDAR by $36mm during the quarter, thus using a normalized hold, EBITDAR (post corporate) would have been approximately $735.8mm. Total company EBITDAR margins increased 750 bps to 35.3% (versus our estimate of 27.8%). The strong EBITDAR margin improvement can be attributed to the higher margin EBITDAR contribution from Singapore (+48.6% margin) as well as strong margin improvements at LVS’ Macau properties (+570bps combined) and Sands Bethlehem (+800bps), which benefitted from the addition of table games. We would buy the LVS shares on material weakness this morning (-10% in after-market trading), which in our view experienced an unwarranted sell off due to low hold (bad luck) in Las Vegas and Singapore, and an additional delay for completion of sites 5/6 in Macau.
Las Vegas Sands (LVS): LVS 1Q11 Preview
May 02 2011
LVS 1Q11 Preview
UGR LVS estimates - We are forecasting total net revenues and property EBITDAR of $2.21bn and $765mm for 1Q11 and EBITDAR (post corporate expense) of $727mm. This compares to consensus net revenues and EBITDAR (post corporate expense) of $2.14bn and $744mm.
Singapore – We anticipate strong volumes offset by lower hold. Based on a run-rate US$6bn gaming market (soon) our 1Q11 revenue and EBITDAR estimates are $633mm and $313mm, respectively. In January 2011, MBS’ EBITDAR exceeded $110mm (excluding Chinese New Year), projecting the current run-rate EBITDAR at over $1.2bn+. While there is a smaller magnitude of VIP players in Singapore relative to scores of junket-manufactured VIPs in Macau, Singapore’s VIPs are materially larger theoreticals. We think MBS has raised table limits to capture this play which could result in stronger volumes. We are projecting sequentially higher VIP volumes but less than half of those at RWS Singapore, a function of current VIP strategy. In addition, we are projecting that MBS under held in the quarter. Our model calls for 49.5% margins in the period, however, on a daily basis, margins are often in the 50%+ range at MBS, a function of a deep market with extremely low gaming taxes and a smart regulatory / governmental system that only issued two licenses. We understand that MBS is capacity constrained in certain week-parts in its electronic games business (slots & e-tables) which given a higher tax rate than VIP works into our margin assumptions.
Macau – Market-wide gaming revenues up 43% in 1Q11. Macau’s 1Q11 market-wide gaming revenues came in at MOP 58.5bn (US$7.3bn) representing an increase of 43% y/y. Based on the MOP19.5bn average monthly GGR during 1Q11, the run-rate would suggest MOP234bn for the full year 2011 (US$29.2bn) or a 24% y/y increase. Based on a confluence of factors we believe GGR growth for the year is likely to exceed this rate and will be towards the higher end of a range of +25% to +30% given that trends in the second half of the year are usually stronger than the first. This would result in GGR of MOP235bn to 245bn (US$29.4bn to $30.6bn) for the year. To put this in perspective, GGR of US$30.6bn in Macau is likely to be more than 5x the amount of GGR on the Las Vegas Strip this year (vs. 4x last year). We believe upside to gaming revenues in Macau are catalyzed by substantial working capital support for junkets by concessionaires, incrementally liberal direct credit play, appreciation in the Chinese Renminbi (RMB) versus the Hong Kong dollar (HKD) and to a degree, strong visitation from mainland China bolstering mass market volumes. In 1Q11 it appears that LVS maintained approximately 17.3% of Macau’s market share. Our 1Q11 Macau EBITDA estimate is $358.4mm (+38.3% vs. 1Q10).
Short interest down marginally for large gaming operators and suppliers
April 12 2011
Short interest data has been released for the period ending 3/31/2011. Below, we present this data for US-listed large / mid cap operators, the regional operators and gaming suppliers / lottery.
Large / mid cap operators
The universe of large / mid cap operators collectively has 7.8% of its free float short (LVS 2.0%, MPEL 4.4%, WYNN 3.6%). Over the past month, short interest for the group has decreased sequentially (-4.5%), with operators: LVS –18.2%, MPEL -14.1%, WYNN +5.2%.
Regional operatorsThe universe of regional operators collectively has 12.1% of its free float short (ASCA 4.3%, BYD 30.5%, ISLE 8.8%, MCRI 2.9%, MNTG 0.2%, PENN 5.8%, PNK 12.3%). Over the past month, short interest for the group has increased slightly on a sequential basis (+2.9%), with operators: ASCA -0.3%, BYD -2.4%, ISLE +30.9%, MCRI +23.1%, MNTG +42.1%, PENN -0.1%, PNK +12.6%.
Gaming suppliers / lotteryThe universe of gaming suppliers / lottery has 6.2% of its free float short (BYI 13.1%, IGT 5.9%, WMS 8.5%, SHFL 4.2%, GCA 2.4%, MGAM 4.3%, SGMS 5.8%). Over the past month, short interest for the group has dropped sequentially (-1.9%), with suppliers: BYI +31.1%, IGT -8.2%, WMS -5.6%, SHFL +33.1%, GCA +5.5%, MGAM +13.4%, SGMS -27.1%.
Singapore visitation up 15.4% to a new February record
March 30 2011
Singapore visitation up 15.4% to a new February record
Visitation recap - Visitation to Singapore increased 15.4% in February, to 990K persons. This represents a new February record (vs. 857K in February 2010). The comp was difficult at +24% and will average +20% for the remainder of the year. Recall that Genting Singapore’s (GENS SP) Resorts World Sentosa opened in late January last year, followed by Las Vegas Sands’ (LVS) Marina Bay Sands in late April.
Mass market strength evident - The strength of the mass market is evident in these record February numbers. Based on recently reported 4Q results, we estimate RWS mass market business accounted for 40% of property GGR, while at MBS, mass market accounted for about 55% (the absolute $ amount of mass market GGR increased sequentially at both).
A comment on VIP - We believe RWS is generating rolling chip volume of US$20-$25bn per quarter, while MBS is producing ~US$10bn per quarter, a function of current VIP strategy.
Visitation sources - All of the top fifteen inbound markets experienced growth, with the top two sources of visitation experiencing above-market-average growth: Indonesia (+23% y/y; representing approximately 18% of total visitation) and China (+5%; representing 15% of total visitation). The highest overall growth rate continues to come from Hong Kong, which experienced growth of 53%.
Hotel metrics wrap-up - Market-wide hotel occupancy was up 310 bps y/y in February to 83%, while average daily rate (ADR) increased 18.3% y/y, to S$220 (US$174). This resulted in RevPAR up 14.2%, to S$183 (US$145). Recall that Singapore typically has higher midweek rather than weekend hotel occupancy given its historical focus on business travel.
Short interest up for large gaming operators and suppliers
March 25 2011
Short interest data has been released for the period ending 3/15/2011. Below, we present this data for US-listed large / mid cap operators, the regional operators and gaming suppliers / lottery.
Large / mid cap operators
The universe of large / mid cap operators collectively has 8.5% of its free float short (LVS 1.9%, MPEL 4.4%, WYNN 4.0%). Over the past month, short interest for the group has increased sequentially (+9.1%), with operators: LVS –26.6%, MPEL +23.7%, WYNN +7.6%.
Regional operators
The universe of regional operators collectively has 12.2% of its free float short (ASCA 4.2%, BYD 31.9%, ISLE 7.7%, MCRI 2.5%, MNTG 0.2%, PENN 6.4%, PNK 11.1%). Over the past month, short interest for the group has decreased sequentially (-1.6%), with operators: ASCA +16.3%, BYD -6.0%, ISLE +16.6%, MCRI +8.7%, MNTG +48.4%, PENN +5.6%, PNK -0.6%.
Gaming suppliers / lottery
The universe of gaming suppliers / lottery has 6.4% of its free float short (BYI 12.8%, IGT 6.3%, WMS 8.9%, SHFL 3.4%, GCA 2.4%, MGAM 4.2%, SGMS 6.6%). Over the past month, short interest for the group has increased sequentially (+5.2%), with suppliers: BYI +29.2%, IGT 0.0%, WMS +0.7%, SHFL +2.2%, GCA +9.1%, MGAM +13.6%, SGMS +1.9%.
Quick take on LV Strip January Visitation
March 11 2011
The New Year started off strong with visitation to Las Vegas up 8.6% in January. This represents more than a full-year (trailing 17 months) of increased (or flat) visitation. The comp was a relatively strong +4.0%. Despite the strong visitation numbers, Las Vegas Strip gaming revenues fell 2.5% in January, primarily due to lower volumes on relatively normal Hold. We believe this is a function of customer mix during the month. As noted below convention attendance grew materially during January driving occupancy and room rates higher. While this is good news on the non-gaming front, conventioneers don’t generally gamble notably.
LV strip revenues down 2.5% in January; Volume down 7.6%
March 10 2011
The Nevada Gaming Control Board released Jan. 2011 gaming revenues this morning down 2.5% to $482.7mm (versus $495.0mm in Jan ‘10). Slot win grew 9.3% in January despite a 240bps drop in volume due to a 90bps increase in hold to 8.7%. The decline is despite the benefit to January from December 2010 ending on a Friday--pushing collections to January. (We note that average slot hold for last five years is 7.0% and due to the timing of slot collections in the new year, avg. slot hold for Jan. has averaged 7.8% over time). Table (ex-baccarat) win was up 5.6% as the segment hold was 12.9% (+140bps y/y), but offset by a 610bps drop in volume. Finally, baccarat win was down 39.7% to $64.8mm on a 190 bps y/y decline in hold to 11.0% (below the three-year average of 11.5%) and 29.3% drop in volume. Adjusting for normalized hold (11.5%), baccarat win would have declined 36.8% to $68.0mm. Overall, hold was relatively flat +50bps on a combined basis for all segments (slots +90bps, baccarat -190bps and tables ex-baccarat +140bps).
Las Vegas strip revenues relatively flat in December (-0.3%); Volume +3.1%
February 10 2011
The Nevada Gaming Control Board released December 2010 gaming revenues this morning down 0.3% to $500.7mm (versus $502.2mm in Dec ‘09). Slot win fell 10.3% in December (due to revenue collection shift stemming from New Year Holiday timing) on a -80bps y/y decline in hold to 5.7%, albeit a 2.4bps increase in volume. We note that average December slot hold for last decade is 5.6%. December slot hold is always lower due to collection dynamics. Table (ex-baccarat) win was up 16.1% as the segment hold was 11.6% (+110bps y/y). Finally, baccarat win was up 1.1% to $157.4mm on a 20 bps y/y decline in hold to 11.5% (in-line with three-year average of 11.5%). Adjusting for normalized hold (-10bps in slots and +20bps in tables), overall gaming revenues would have decreased 0.5% to $499.7mm. However, using the adj. y/y hold % (+80 bps in slots and -110 bps in tables), overall revs would have increased 2.5% to $514.9mm.
Quick take on Las Vegas Strip December Visitation
February 08 2011
Visitation to Las Vegas increased 3.7% in December, representing more than a full-year (trailing 16 months) of increased (or flat) visitation. The comp was at a neutral +1.5%. For full-year 2010 visitation grew 2.7%. Visitation growth in December was more favorable than full-year and the trailing-three-month growth rate (+3.0%).
Las Vegas Sands (LVS): 4Q10 results recap and read-through
February 04 2011
Las Vegas Sands reported a spectacular quarter across Singapore and Macau, while Vegas was even encouraging. The company truly over-delivered at Marina Bay Sands while dizzying expectations into the print are driving the LVS shares lower this AM. There is some focus on lower sequential rolling chip volume which we believe is a function of seasonality along with a smaller number of (yet higher value) VIPs. This is structurally different than Macau’s junket manufactured VIP base. Suggesting this is a negative exercise in intellectual dishonesty in our view, which misses the bigger picture, especially sans junkets. We would buy the LVS shares on material weakness this AM (-7%) which on an embedded basis appear to be notably undervaluing Singapore or Las Vegas (or both). The free cash flow story at LVS continues to improve with magnitude that should enable the company to de-lever with greater expediency than most models anticipate. As a read-through from the LVS quarter we’d also be buyers of MGM on Las Vegas improvement as well as Genting Singapore (GENS) into its late February results.
Las Vegas Sands (LVS): 4Q10 Preview – buy LVS on Singapore, yes still…
February 01 2011
We are forecasting total net revenues and EBITDAR (post corporate expense) of $2.27bn and $718mm for 4Q10 and property EBITDAR of $752mm (versus consensus of $700mm). This compares to consensus net revenues and EBITDAR (post corporate expense) of $2.06bn and $679mm. Our estimates presumably capture higher rolling chip volume in Singapore (albeit at a slightly lower than theoretical hold %) and greater gaming revenue growth in Macau relative to consensus.
January Vegas convention analysis—upside surprise
January 31 2011
Early convention attendance figures in January suggest a strong start to the Las Vegas convention business in 2011. For conventions with 5,000+ delegates, the Las Vegas Convention & Visitors Authority (LVCVA) projected 419,500 visitors would come to Las Vegas during January 2011 representing a 19.1% increase over 2010. Part of this is a function of new conferences as January 2011 benefited from three new shows this year (SAP, Arbonne International and Air-Conditioning & Heating Expo) accounting for an approximate 60,000 delegates combined. However, the unaudited numbers of actual visitors for January’s largest four conventions (~40% of total January large convention delegate volume) tell a more important and incrementally bullish story. The result of which we estimate translates to 433,390 delegates in January, 3% more than the LVCVA’s original projection, and 23% growth YoY.
Las Vegas ADRs up 2.3% in November; visitation up 1.0%
January 11 2011
Visitation to Las Vegas increased 1.0% in November, representing more than a full-year (trailing 15 months) of increased (or flat) visitation. The comp was at a steady +2.9%. On a YTD basis (thru Nov 2010), visitation is up 2.6%.
Baccarat negatively affects Las Vegas Strip revenues in November
January 11 2011
The Nevada Gaming Control Board released Nov 2010 gaming revenues this morning down 4.1% to $454mm (versus $473.8mm). Slot win increased 10.3% in November on a +100bps y/y improvement in hold to 8.2%, albeit a 330bps decline in volume. Table (ex-baccarat) win was down 12.9% as the segment hold was down to 11.2% (-140bps y/y). Finally, baccarat win was down 25.8% to $68.8mm on a 120 bps y/y decline in hold to 12.2% (vs. three-year average of 11.5%). It is important to note that baccarat volume was down 18.6% in November. We note that Nov 2010 had one less weekend day when compared to Nov 2009.
Solid LV Strip mass-market gaming volumes tell the recovery story
December 09 2010
The Nevada Gaming Control Board released October 2010 gaming revenues this morning. Baccarat over-held (+940bps YoY and +750bps relative to its three-year average) and along with revenues from blackjack (+44.0%), craps (+10.9%) and roulette (+17.6%) resulted in total LV Strip gaming revenues up 16.1% during the period. Year-to-date, LV Strip gaming revenues were up 9.6%. We note that since October 2010 ended on a weekend slot collections for the last days of the month will be booked in November, however this is a clean YoY comparison since the same was true in October 2009.
U.S. Internet Poker—early details and quantification
December 08 2010
Iterations of a draft Internet poker bill introduced by Harry Reid have been circulating. In our estimation, never before has the passage of Internet poker, at the federal level, been as probable as it at this moment. The Internet Poker Regulation Act proposes to amend the Unlawful Internet Gambling Enforcement Act to allow for traditional payment processing for internet poker and to legalize internet poker at the federal level. There are a number of critical variables which are subject to change from here.
LV ADRs up 6.7% in Sept.; visitation up 2.0%
November 10 2010
Visitation to Las Vegas increased 2.0% in September, representing more than a full-year (trailing-thirteen months) of increased (or flat) visitation. The comp was notable at 4.3%. On a YTD basis, visitation is up 2.4%.
During September hotel occupancy was 84.8% (-220 bps y/y), while weekend occupancy was 89.6% (-190 bps y/y) and midweek was 78.9% (-70 bps y/y). Most importantly, average daily rate (ADR) was $97.25 ( 6.7% y/y), despite a 5.1% increase in room inventory and represented the seventh consecutive increase in rate after more than two years of declines.
September LV Strip revenues 2.8% on strong baccarat
November 10 2010
The Nevada Gaming Control Board released September gaming revenues this morning. Baccarat held a bit lucky and was the only segment to post an increase during the month resulting in total LV Strip gaming revenues up 2.8%. Through the end of 3Q10, LV Strip gaming revenues were up 7.7% (despite baccarat under holding over the three-month period).
During September, gaming volume (amount wagered) was flat on a combined basis for all segments (slots -4.1%, baccarat 17.2% and tables ex-baccarat -1.1%).
Gaming short interest down for operators and suppliers
November 10 2010
Short interest data has been released for the period ending 10/31/2010. Below, we present this data for US-listed large / mid cap operators, the regional operators and gaming suppliers / lottery.
The universe of large / mid cap operators collectively has 15.1% of its free float short (LVS 13.6%, MGM 25.3%, MPEL 2.5%, WYNN 8.5%). Over the past month, short interest for the group has declined sequentially (-11.9%), with operators: LVS -6.5%, MGM -15.8%, MPEL 23.7%, WYNN -14.0%.
The universe of regional operators collectively has 11.1% of its free float short (ASCA 5.9%, BYD 28.3%, ISLE 10.5%, MCRI 3.3%, MNTG 0.2%, PENN 3.4%, PNK 11.1%). Over the past month, short interest for the group has declined sequentially (-1.1%), with operators: ASCA -10.5%, BYD -5.8%, ISLE -5.9%, MCRI -4.5%, MNTG 60.2%, PENN 10.8%, PNK 11.5%.
The universe of gaming suppliers / lottery has 5.1% of its free float short (BYI 10.2%, IGT 4.7%, WMS 7.9%, SHFL 3.8%, GCA 2.5%, MGAM 4.0%, SGMS 4.6%). Over the past month, short interest for the group has declined sequentially (-8.2%), with suppliers: BYI -2.9%, IGT -3.1%, WMS -4.3%, SHFL -10.1%, GCA -19.7%, MGAM 0.2%, SGMS -32.6%.
Macau thoughts following Central Gov meeting in Beijing
November 09 2010
On a trip to Beijing last week we participated in a small group meeting with Minister Wang Guangya, new Director of the Hong Kong and Macau Affairs Office of the State Council. The Director is an extremely high ranking Chinese official. As it relates to Macau, the Director is responsible for all affairs of the Special Administrative Region (SAR) on behalf of the Chinese Premier. He is the conduit to China's Central Government for Macau's Chief Executive, Fernando Chui Sai On.
We found the Director's message with respect to Macau to be piercingly clear and direct. With a backdrop of protectionism for Macau's population his intent is to foster greater economic diversity in Macau, particularly via horizontal means. He will support development and investment that is complimentary to gaming in an effort to make Macau less vulnerable to another financial crisis (global, Asian, Chinese or otherwise). We believe the Director's message ties nicely with China's proposed, 12th 5-year program (2011-2015) which stresses economic development and social improvement, to be adopted in Spring 2011.
Singapore visitation up 18% in September; up 22% YTD
October 29 2010
Visitation to Singapore increased 18% in September and is now up 22% on a YTD basis following the opening of Genting Singapore’s (GENS SP) Resorts World Sentosa in late January and Las Vegas Sands’ (LVS) Marina Bay Sands in late April. This compares to full-year visitation declines of 2% in 2008 and 4% in 2009. The comps began to get difficult this month at 8% and with the exception of October (-1%) will remain tough going forward. The absolute number of visitors in September was 947,000, which was the third highest number of record relative to 1,095,000 in July. In addition to visitation driven by the new Integrated Resorts, September visitation was boosted by the Singapore F1 Grand Prix.
Las Vegas Sands (LVS): Singapore off to the races; post 3Q10 conference call thoughts
October 28 2010
In its first full quarter of operations, Marina Bay Sands (MBS) reported net revenues of $485.9mm and EBITDAR of $241.6mm (a 49.7% margin), despite still limited non-gaming amenities available and lower-than-expected hold on rolling chip play of 2.65%. We believe average hold in the region (Genting Highlands) has been 2.70% to 2.75% since 1965, or about 5bps to 10 bps higher than 3Q10 hold at MBS. Accounting for a more normalized hold of 2.70% we believe MBS adjusted property EBITDAR would have been closer to $250mm .
Results in Macau continue to be very strong, although not surprisingly so given reported monthly revenues consistently in excess of MOP 15bn. During the quarter, all of LVS’ Macau assets held higher than our expectations for VIP play and beat our net revenue and EBITDAR forecasts for 3Q10 by 12.9% and 26.3%, respectively. Our new estimates for 4Q10 and beyond are detailed in a following section and contemplate more normalized hold, although similar gaming volumes on a sequential basis.
Short interest down for operators and suppliers
October 27 2010
Short interest data has been released for the period ending 10/15/2010. Below, we present this data for US-listed large / mid cap operators, the regional operators and gaming suppliers / lottery.
The universe of large / mid cap operators collectively has 16.2% of its free float short (LVS 14.6%, MGM 26.9%, MPEL 2.9%, WYNN 9.4%). Over the past month, short interest for the group has declined sequentially (-6.8%), with operators: LVS -2.3%, MGM -10.2%, MPEL 28.4%, WYNN -9.6%.
The universe of regional operators collectively has 11.2% of its free float short (ASCA 6.3%, BYD 29.0%, ISLE 10.8%, MCRI 3.3%, MNTG 0.1%, PENN 3.5%, PNK 10.9%). Over the past month, short interest for the group has declined sequentially (-5.7%), with operators: ASCA -19.5%, BYD -7.5%, ISLE -12.2%, MCRI -10.5%, MNTG 4.1%, PENN -3.1%, PNK 4.7%.
The universe of gaming suppliers / lottery collectively has 5.4% of its free float short (BYI 9.8%, IGT 4.9%, WMS 8.0%, SHFL 4.0%, GCA 2.7%, MGAM 3.9%, SGMS 6.1%). Over the past month, short interest for the group has declined sequentially (-9.5%), with suppliers: BYI -12.2%, IGT -7.6%, WMS 4.0%, SHFL -12.8%, GCA -18.5%, MGAM -11.7%, SGMS -19.2%).
Short interest up for big cap operators, down for the rest
October 13 2010
Short interest data has been released for the period ending 9/30/2010. Below, we present this data for US-listed large / mid cap operators, the regional operators and gaming suppliers / lottery.
The universe of large / mid cap operators collectively has 19.1% of its free float short (LVS 15.8%, MGM 38.3%, MPEL 2.0%, WYNN 10.0%). Over the past month, short interest for the group has increased sequentially ( 2.8%), with operators: LVS 9.3%, MGM -0.6%, MPEL -1.4%, WYNN 12.9%.
The universe of regional operators collectively has 11.3% of its free float short (ASCA 6.7%, BYD 30.2%, ISLE 11.8%, MCRI 3.5%, MNTG 0.1%, PENN 3.1%, PNK 10.0%). Over the past month, short interest for the group has declined sequentially (-10.0%), with operators: ASCA -15.4%, BYD -7.9%, ISLE -16.9%, MCRI -6.5%, MNTG -15.1%, PENN -18.3%, PNK -9.2%.
The universe of gaming suppliers / lottery collectively has 5.6% of its free float short (BYI 10.4%, IGT 4.8%, WMS 8.2%, SHFL 4.2%, GCA 3.0%,
MGAM 4.0%, SGMS 6.8%). Over the past month, short interest for the group has declined sequentially (-11.2%), with suppliers: BYI -4.0%,
IGT -15.9%, WMS 11.2%, SHFL -12.3%, GCA -18.8%, MGAM -13.1%,
SGMS -17.9%).
LV visitation up 3.5% in August; up 2.5% YTD
October 08 2010
Visitation to Las Vegas increased 3.5% in August, representing a full-year (trailing-twelve months) of increased (or flat) visitation. The comp was very easy at -3.7%. On a YTD basis, visitation is up 2.5%.
During August hotel occupancy was 84.9% (-110 bps y/y), while weekend occupancy was 89.2% ( 60 bps y/y) and midweek was 79.6% ( 110 bps y/y). Importantly, average daily rate (ADR) was $87.40 ( 4.0% y/y), despite a 5% increase in room inventory and represented the sixth consecutive increase in rate after more than two years of declines. We estimate RevPAR was $71.67 ( 4.8% y/y). Finally, convention attendance was up a strong 46.3% y/y ( 2.2% YTD). See our report “Large convention bookings a positive proxy for 2H10” from September 9, 2010.
August LV Strip revenues 21% despite baccarat under-holding
October 08 2010
The Nevada Gaming Control Board released August gaming revenues this morning. Although baccarat continues to under-hold (four out of past five months), total LV Strip gaming revenues were still up 21.1%. On a QTD basis, LV Strip gaming revenues are up 10.4%.
During August, gaming volume (amount wagered) was up 17.8% combined for all segments (slots -1.0%, baccarat 87.2% and tables ex-baccarat 6.7%). Slot win was actually up 13.2% as it benefitted from the timing of July’s month end, which would have pushed some slot collections into August. Table games (ex-baccarat) revenue was up 11.9% on fairly normal hold percentage. Finally, baccarat revenue increased 47.2% on hold percent of just 8.3% (hold % down 230 bps y/y, and well below last 24-month average of 10.5%). We estimate that on normalized baccarat hold, LV Strip revenues would have been $40mm higher in August, or up 30.4%.
Singapore visitation 18% in August, now 22% YTD
September 28 2010
Visitation to Singapore increased 18% in August and is now up 22% on a YTD basis following the opening of Genting Singapore’s (GENS SP) Resorts World Sentosa in late January and Las Vegas Sands’ (LVS) Marina Bay Sands in late April. This compares to full-year visitation declines of 2% in 2008 and 4% in 2009. The comps begin to get more difficult going forward (was -1% this month and then will be flat to high-single-digits through December). The absolute number of visitors in August was 996,000, which was the second highest number of record relative to 1,095,000 in July.
Short interest up for both operators and suppliers
September 13 2010
Short interest data has been released for the period ending 8/31/2010. Below, we present this data for US-listed large / mid cap operators, the regional operators and gaming suppliers / lottery.
The universe of large / mid cap operators collectively has 18.6% of its free float short (LVS 14.4%, MGM 38.5%, MPEL 2.0%, WYNN 8.8%). Over the past month, short interest for the group has increased sequentially ( 8.0%), with operators: LVS -2.9%, MGM 13.9%, MPEL -18.1%, WYNN 27.5%.
The universe of regional operators collectively has 12.5% of its free float short (ASCA 7.9%, BYD 32.8%, ISLE 13.8%, MCRI 3.7%, MNTG 0.1%, PENN 3.8%, PNK 11.0%). Over the past month, short interest for the group has increased sequentially ( 17.7%), with operators: ASCA 30.2%, BYD 25.0%, ISLE -6.8%, MCRI 4.4%, MNTG -17.0%, PENN 7.5%,
PNK 10.3%.
The universe of gaming suppliers / lottery collectively has 6.3% of its free float short (BYI 10.8%, IGT 5.8%, WMS 7.4%, SHFL 4.8%, GCA 3.7%, MGAM 4.6%, SGMS 8.3%). Over the past month, short interest for the group has increased sequentially ( 9.9%), with suppliers: BYI 3.4%, IGT 15.3%, WMS 3.5%, SHFL 2.6%, GCA 10.3%, MGAM 9.8%, SGMS 9.5%).
LV visitation up 4.7% in July; up 2.3% YTD
September 10 2010
Visitation to Las Vegas increased 4.7% in July, the 11th consecutive month of increased (or flat) visitation. The comp was relatively easy at -1.3%. On a YTD basis, visitation is up 2.3%.
During July hotel occupancy was 86.9% (-120 bps y/y), while weekend occupancy was 90.2% (-110 bps y/y) and midweek was 80.6% (-20 bps y/y). Importantly, average daily rate (ADR) was $90.38 ( 4.8% y/y) and represented the fifth consecutive increase in rate after more than two years of declines. We estimate RevPAR was $75.92 ( 4.6% y/y). Finally, convention attendance was up 28.4% y/y (-1.4% YTD). See our report “Large convention bookings a positive proxy for 2H10” from September 9, 2010.
July LV Strip revenues flat; LV Locals down 16%
September 10 2010
The Nevada Gaming Control Board released July gaming revenues this morning. After three consecutive months of declines on the Strip (largely on poor baccarat hold), gaming revenues were flat, at $461mm. On a YTD basis, Strip gaming revenues are now up 2.2%.
During July, gaming volume (amount wagered) was up 4.9% combined for all segments (slots -3.2%, baccarat 39.6% and tables ex-bacc 11.8%). Slot win was down 7.7% on slightly lower hold percentage but also likely impacted by the timing of month end (Saturday slot collections pushed into August numbers). Table games (ex-bacc) revenue was up 7.7% on fairly normal hold percentage. Finally, baccarat revenue increased 9.0% on hold percent of 10.0% (hold % down 280 bps y/y, but inline with last 24-month average of 10.5%).
“Large” convention bookings positive proxy for 2H10
September 09 2010
We’ve been examining forward Las Vegas convention bookings and are encouraged by the results for “Large”-conventions (10k delegates). Large convention bookings in 2H10 suggest modest positive inflection, which in turn we believe will help week-day room rates. Further, this should aid visibility for the Las Vegas Strip and may be a precursor to a longer-term recovery.
With some help from extremely weak comparables in 2009, 2H10 large convention bookings growth looks encouraging. For the most recent data available, May and June 2010 large conventions generated 62,000 and 107,000 delegates, which compares favorably to 57,000 and 102,524 delegates in 2009, respectively. This 5.9% two-month growth rate compares to the -4.1% average decline YTD (through June 2010) and -23.9% decline for full-year 2009. According to the Las Vegas Visitors and Convention Authority, large conventions represented 33.4% of overall convention visitors in 2009 and 30.1% on average for the past five years.
Singapore visitation 24% in July, now 23% YTD
August 27 2010
Visitation to Singapore increased 24.1% in July and is now up 22.9% on a YTD basis following the opening of Genting Singapore’s (GENS SP) Resorts World Sentosa in late January and Las Vegas Sands’ (LVS) Marina Bay Sands in late April. This compares to full-year visitation declines of 2% in 2008 and 4% in 2009. Twelve of the top fifteen inbound markets experienced growth, with notable sources of gaming volume: China 63%, Malaysia 53%, Hong Kong 40% and Indonesia 37%. Market-wide hotel occupancy was up 1,020 bps y/y in June to 90%, while average daily rate (ADR) increased 19.9% y/y, to S$209. This resulted in RevPAR up 35%, to S$188. We note that LVS intends to price its room product at the high-end of the market. Recall that Singapore typically has higher midweek rather than weekend hotel occupancy given its historical focus on business travel. In its stub 2Q (without the full complement of hotel rooms and other non-gaming amenities), Marina Bay Sands occupancy and ADR were 54.9% and US$226 (S$306).
Short interest flat sequentially for operators and down for suppliers
August 25 2010
Short interest data has been released for the period ending 8/13/2010. Below, we present this data for US-listed large / mid cap operators, the regional operators and gaming suppliers / lottery.
The universe of large / mid cap operators collectively has 17.3% of its free float short (LVS 15.3%, MGM 33.5%, MPEL 1.7%, WYNN 8.8%). Over the past month, short interest for the group has declined sequentially (-3.8%), with operators: LVS 1.2%, MGM -2.2%, MPEL -63.7%, WYNN 22.7%.
The universe of regional operators collectively has 11.5% of its free float short (ASCA 7.3%, BYD 27.9%, ISLE 14.0%, MCRI 3.6%, MNTG 0.2%, PENN 3.9%, PNK 11.1%). Over the past month, short interest for the group has increased sequentially ( 13.7%), with operators: ASCA 32.1%, BYD 15.6%, ISLE -26.0%, MCRI 4.0%, MNTG -10.2%, PENN 59.9%, PNK 10.1%).
The universe of gaming suppliers / lottery collectively has 5.7% of its free float short (BYI 9.8%, IGT 5.1%, WMS 7.0%, SHFL 4.6%, GCA 3.2%, MGAM 4.1%, SGMS 7.7%). Over the past month, short interest for the group has declined sequentially (-6.0%), with suppliers: BYI -22.6%, IGT 1.7%, WMS -10.3%, SHFL 0.1%, GCA -9.0%, MGAM -4.8%, SGMS -4.4%).
Short interest flat sequentially for operators and down for suppliers
August 11 2010
Short interest data has been released for the period ending 7/30/2010. Below, we present this data for US-listed large / mid cap operators, the regional operators and gaming suppliers / lottery.
The universe of large / mid cap operators collectively has 17% of its free float short (LVS 15%, MGM 34%, MPEL 2%, WYNN 7%). Over the past month, short interest for the group has increased nominally ( 0.3%) on a sequential basis (LVS -1%, MGM 7%, MPEL -43%, WYNN -16%).
The universe of regional operators collectively has 11% of its free float short (ASCA 6%, BYD 26%, ISLE 15%, MCRI 4%, MNTG 0%, PENN 4%, PNK 10%). Over the past month, short interest for the group has declined 2% sequentially (ASCA -7%, BYD 4%, ISLE -41%, MCRI 5%, MNTG 15%, PENN 49%, PNK -7%).
The universe of gaming suppliers / lottery collectively has 6% of its free float short (BYI 10%, IGT 5%, WMS 7%, SHFL 5%, GCA 3%, MGAM 4%, SGMS 7%). Over the past month, short interest for the group has declined 13% sequentially (BYI -28%, IGT -11%, WMS -12$, SHFL 1%, GCA -11%, MGAM -6%, SGMS -10%).
Las Vegas Sands (LVS): Singapore slings the EBITDA; post 2Q10 conf call thoughts; new estimates
July 28 2010
We are forecasting total revenues and EBITDAR of $1.7bn and $490mm (from $435mm) for 3Q10. For the full year 2010, we are forecasting $6.4bn in revenue and $1.78bn in EBITDAR (from $1.62bn). For the full year 2011, we are forecasting $7.4bn in revenue and $2.2bn in EBITDAR (from $2.1bn). Most of the increase to our forecast can be attributed to our new estimates for Marina Bay Sands, including taking our 2011 EBITDAR estimate to $879.7mm, from $796.3mm.
Shares of LVS are currently trading at 14.7x our 2010 EBITDAR estimate and 11.6x our 2011 est. This compares to its large cap US and Asian peers at 14.2x 2010 EBITDA and 10.5x 2011 EBITDAR (including Genting Singapore at 21.7x and 15.3x 2010 and 2011, respectively). We think 2011 is the more appropriate valuation comp given that it includes a full-year of cash flow from MBS Singapore.
Short interest up sequentially for operators and down for suppliers
July 27 2010
Short interest data has been released for the period ending 7/15/2010. Below, we present this data for US-listed large / mid cap operators, the regional operators and gaming suppliers / lottery.
The universe of large / mid cap operators collectively has 18% of its free float short (LVS 15%, MGM 34%, MPEL 5%, WYNN 7%). Over the past month, short interest for the group has increased 7% sequentially (LVS -4%, MGM 15%, MPEL 13%, WYNN -10%).
The universe of regional operators collectively has 10% of its free float short (ASCA 6%, BYD 24%, ISLE 19%, MCRI 3%, MNTG 0%, PENN 2%, PNK 10%). Over the past month, short interest for the group has increased 4% sequentially (ASCA -21%, BYD 15%, ISLE -4%, MCRI -6%, MNTG 7%, PENN -15%, PNK flat).
The universe of gaming suppliers / lottery collectively has 6% of its free float short (BYI 13%, IGT 5%, WMS 8%, SHFL 5%, GCA 4%, MGAM 4%, SGMS 8%). Over the past month, short interest for the group has declined 4% sequentially (BYI -17%, IGT -8%, WMS 4%, SHFL -9%, GCA 9%, MGAM 6%, SGMS 31%).
Singapore visitation 27% in June, 23% YTD
July 27 2010
Visitation to Singapore increased 26.7% in June and is now up 22.6% on a YTD basis following the opening of Genting Singapore’s (GENS SP) Resorts World Sentosa in late January and Las Vegas Sands’ (LVS) Marina Bay Sands in late April. This compares to visitation declines of 2% in 2008 and 4% in 2009. Fourteen of the top fifteen inbound markets experienced growth, with notable sources of gaming volume: China 66%, Malaysia 51%, Hong Kong 48% and Indonesia 34%. Market-wide hotel occupancy was up 1,230 bps y/y in June to 88%, while average daily rate (ADR) increased 22.7% y/y, to S$219. This resulted in RevPAR up 42.6%, to S$192. We note that LVS intends to price its room product at the high-end of the market. Recall that Singapore typically has higher midweek rather than weekend hotel occupancy given its historical focus on business travel.
Las Vegas Sands (LVS): Earnings preview and updated thoughts
July 16 2010
Much like our commentary earlier this week on WYNN, we believe LVS is seeing weekend strength at Venetian and Palazzo, particularly with respect to the ability to raise room rates without sacrificing occupancy. High-end table volume appears to be relatively stable as well despite new supply notwithstanding seasonal sequential softening in May/June. However, mid-week business is still tough with weaker room rates and a less-than-ideal customer base (gamers with lower theoretical). We think group business is picking up and LVS will finish 2010 with more group room nights sold on a y/y basis, although at a lower ADR and likely lower RevPAR.
During 2Q10, Macau gaming revenue increased about 76% ( 66% YTD), although we would remind investors that comps begin to get quite difficult beginning in September ( 55%), while the average comp in 4Q10 is 50%. Ultimately, we believe the strength in level of gaming revenues (not y/y growth) will extend through the remained of 2010. This is a non-consensus view as we anticipate non-sustainable junket funding / working capital velocity and a hands-off stance from the central government to continue through the one-year anniversary of the new administration in Macau.
May LV Strip revenues flat if baccarat hold was normal; LV Locals flat
July 07 2010
The Nevada Gaming Control Board released May gaming revenues this morning. Gaming revenues on the Las Vegas Strip were down 6.4% but are still up 4.3% on a YTD basis. Through the first two months of 2Q10, Las Vegas Strip gaming revenues are down 3.8%.
During May, gaming volume (amount wagered) was down 2.1% across all segments (slots -3.5%, baccarat 1.6% and tables ex-bacc -0.3%). Slot win was up 3.6% on slightly higher hold percentage but still within a normal range. Table games (ex-bacc) revenue was down 1.8%, but also on normal hold percentage. Finally, baccarat revenue was down 37.1% as the Strip under held by about 400 bps.
Chinese currency appreciation very positive for Macau
June 21 2010
China's central bank has signaled it may finally allow its currency to appreciate against the dollar, ultimately making the U.S. and others more competitive with China. Since the Hong Kong dollar / Macau Pataca are pegged to the USD and given the majority of play in Macau is from mainland Chinese, the conversion of their renminbi has important implications for Macau.
This would be a very positive development for Macau and each of the gaming operators in that market. Essentially any appreciation of China's currency against the USD creates buying power for Chinese in Macau where HKD and Patacas are used by VIP and the mass market. Players essentially will have more capital (magnitude depends on amount of appreciation over time), losses become more affordable, working capital velocity likely plays a role in these incremental volumes as well, and perhaps limits on hard currency for offshore travel will ease (mass market).
Honeymoon Ending in Macau? A Look at Recent PBOC Actions
January 14 2010
China’s central bank, The People’s Bank of China (PBOC) unexpectedly tightened monetary policy earlier this week using a favored tool of raising the reserve requirement ratio (RRR). The increase was the first since June 2008 which then capped a cycle of 20 increases totaling 1,050 bps beginning in mid-2006. During the central bank’s late December 2009 quarterly meeting Monetary Policy Committee members noted that despite the upturn in China the economy lacks internal forces to sustain the recovery.
Members communicated plans for 2010 to maintain a proper balance between support for economic development, and managing inflation, highlighting the importance of continuing relatively easy monetary policy. However, the market immediately interpreted the move as a change in posture by China to more of a tightening stance (and stocks with Macau gaming exposure felt it disproportionately) in order to cool credit and asset growth which has been driven by looser monetary policy (underscored by RRR easing from September 2008 onward).