GGRAsia – Only two large cap Asia casino ops stock gainers in 2015

Only two large cap Asia casino ops stock gainers in 2015

Jan 04, 2016 Newsdesk Latest News, Macau, Philippines, Rest of Asia, Singapore, Top of the deck

South Korea’s Kangwon Land Corp and Genting Malaysia Bhd were the only major listed casino operators in Asia to record annual share price increases for 2015. All other remaining firms in the region posted stock price losses for the period, show data compiled by GGRAsia from investment research firm Morningstar Inc.

Kangwon Land and Genting Malaysia each enjoy some sort of domestic monopoly on gaming. Kangwon Land is the operator of the only casino resort in South Korea where the country’s nationals are allowed to gamble; while Genting Malaysia is the operator of Resorts World Genting, Malaysia’s only casino resort.

Kangwon Land shares – listed on the Korea Exchange – ended calendar year 2015 valued at KRW38,400.00 (US$32.39) apiece. That was an increase of 26 percent compared to their closing price at the end of 2014 – KRW30,400.00 a unit.

In comparison, the Korea Exchange share listings of two Korean operators of foreigners-only casinos each showed annual price losses. Grand Korea Leisure Co Ltd ended 2015 with its stocks down 25 percent year-on-year, at KRW24,200 per unit; the stock of its market rival Paradise Co Ltd ended the year with a price of KRW17,650 apiece, representing a decline of 25 percent in annual terms.

In a note issued on December 18, Daiwa Securities Group Inc said – based on a briefing one of its analysts had from the management of Kangown Land – that company executives expected solid casino game demand in South Korea at the start of 2016, driven by improved accessibility and better service infrastructure.

“As management sees robust demand for casino gaming in [South] Korea, it projects modest growth in the utilisation rate of its new casino tables throughout 2016,” Daiwa analyst Thomas Y. Kwon wrote. He added: “Management emphasised that it would do its best to maintain its monopoly business model.”

Malaysian winner

Genting Malaysia was Asia’s only other major casino operator recording an annual share price increase for last year. Its stocks – listed on Bursa Malaysia – were worth MYR4.38 (US$1.01) at the end of 2015, up by 8 percent in annual terms.

Besides running Resorts World Genting, the firm operates casinos in the United States, the Bahamas and the United Kingdom. It reported group wide revenue of MYR2.03 billion for the three months to September 30, down nearly 9 percent from a year earlier.

Elsewhere, the full-year picture was grim for Asian casino names.

The prices of shares in Macau’s six casino operators dropped between 30 percent and almost 60 percent during the past year.

In Singapore, Genting Singapore Plc – the developer of casino Resorts World Sentosa and listed in the city-state’s stock exchange – saw its stock price declined 29 percent in 2015.

Las Vegas Sands Corp, which controls Singapore’s other casino resort – Marina Bay Sands –, recorded a loss of 25 percent in share price for 2015. The U.S.-listed firm also controls Macau-based casino operator Sands China Ltd and owns casinos in the United States.

NagaCorp Ltd, the firm behind Cambodia’s largest casino – NagaWorld in capital Phnom Penh –, recorded an annual decline of 23 percent in share price for 2015. Its stock, listed in the Hong Kong Stock Exchange, closed the year trading at HKD4.90 (US$0.63) per unit.

The scenario for casino operators in the Philippines was also grim in 2015, with heavy annual stock prices losses. They ranged from 46 percent for Travellers International Hotel Group Inc – operator of the Resorts World Manila casino hotel – to more than 80 percent in the case of Melco Crown Philippines Resorts Corp, which operates the City of Dreams Manila property. Bloomberry Resorts Corp – the developer of Solaire Resort and Casino – posted an annual decline in share price of 64 percent for the period.

Hong Kong-listed Genting Hong Kong Ltd, a substantial shareholder in Philippines-based Travellers International and also the owner of casino cruise ship operator Star Cruises, saw the price of its stocks decline by about 3 percent in 2015, to end the year at HKD2.64.