The Macau gaming industry is booming and according to Citi (NYSE:C) estimated revenue for casinos in the region could total almost $30 billion this year.
In comparison Las Vegas gaming revenue was $10.2 billion in 2009 and is not expected to reach $12.5 billion until 2014.
Unlike the Las Vegas casinos which are only now recovering from the recession and have to deal with new American competitors, the Macau casinos did not feel the heat of an economic downturn and have only increased their wealthy customer base.
Macau-related stocks outperformed the Hang Seng Index (NYSE:FXI) by 118% in 2010, driven by 58% gaming revenue growth.
MELCO CROWN ENTERTAINMENT: More traffic will keep earnings up
CEO: Lawrence Ho Ticker: (NASDAQ:MPEL)
Macau properties: Crown Towers, Hard Rock Hotel, Grand Hyatt Macau (NYSE:H), Altria Macau
Citi expects Melco to generate earnings before interest, taxes, depreciation and amortization of nearly $129 million which is 7% above the current consensus of $120 million.
The People’s Bank of China rate hikes and a liquidity crunch from the mainland could hurt Melco’s VIP business, but near-term growth is expected to be sustainable.
Expansion Plans: CEO Lawrence Ho said they were going to focus on strengthening the City of Dreams brand and would like to invest more in Macau.
MELCO CROWN ENTERTAINMENT: Melco Towers in Macau
Photo Source: Melco Crown
Melco Crown has reached a deal with the Macau government to alter the design for the towers.Source: Citi
MELCO CROWN ENTERTAINMENT: Grand Hyatt Macau
MELCO CROWN ENTERTAINMENT: Melco Altria
Citi values Altria at 10 times the 2011 Enterprise Value/Earnings before Interest Taxes, Depreciation, Amortization. It is a 38-story complex with 216 rooms.Source: Citi, Melco Crown
MGM RESORTS INTERNATIONAL: Looking to expand
CEO: Jim Murren Ticker: (NYSE:MGM)
Macau properties: MGM Grand Macau
The company owns the MGM Grand Macau in partnership with Pansy Ho, casino billionaire Stanley Ho’s daughter.
The Macau operation is now using 427 gaming tables instead of around 380 which it did for most of 2010 because it sees so much potential in the area.
MGM Resorts has had a boost with the recent recovery in Las Vegas and the launch of its new customer loyalty program, M life.
MGM RESORTS INTERNATIONAL: MGM Grand Macau
LAS VEGAS SANDS: With two more sites opening by 2012 it is poised for massive revenue growth
CEO: Sheldon Adelson
Macau Properties: Venetian Macau, Plaza Casino, Four Seasons Hotel Macau, Sands Macau
Revenue generated by the three casinos in Macau totaled $952.8 million in the fourth quarter. By comparison, its two Las Vegas properties generated $263.7 million.
Expansion Plans: It will open gaming Sites 5 & 6 by 2012 which Citi expects will boost it to becoming the big market-share winner, rising to an estimated 22% of the market from 19% in 2011.
LAS VEGAS SANDS: Sands Macau
LAS VEGAS SANDS: Venetian Macau Hotel and Plaza Casino
Photo Source: Las Vegas Sands
Opened in 2008, it is the largest single block style hotel in Asia and one of the largest buildings in the world.Source: travelchinaguide
LAS VEGAS SANDS: Four Seasons Hotel Macau
The hotel has 360 rooms.Source: Four Seasons
GALAXY ENTERTAINMENT: Increasing market share with opening of Galaxy Macau this year
CEO: Michael Mecca Ticker: (NYSE:MGM)
Macau Properties: Starworld Hotel and Casino (NYSE:HOT), Waldo Casino & Hotel, President Hotel & Casino, Rio Casino, Grand Waldo Casino, opening the Galaxy Macau in March
It is expected to grow an additional 15% to nearly $34 billion in early 2012.
Expansion Plans: The Galaxy Macau which is opening with 2,200 rooms in March, is expected to become the largest market share winner this year and will be as competitive as major casinos such as Venetian Macao and Wynn Macau.
This building will be ready before the two new Sands sites.
It will be helped by the new Zuhai North-Gongbei Gate extension of the MRT line.
GALAXY ENTERTAINMENT: Galaxy Macau
Image: Galaxy Entertainment
It will be completed by March of this year.
GALAXY ENTERTAINMENT: Grand Waldo Hotel and Casino
Photo Source: AP
It has 316 gaming machines and 115 table and poker games.Source: Galaxy Entertainment
GALAXY ENTERTAINMENT: Galaxy Starworld Hotel & Casino
It has 240 gaming tables and a total of 500 slots.Source: Galaxy Entertainment
GALAXY ENTERTAINMENT: President Casino & Hotel
The President Hotel Macau added its own casino a few years ago. It has 60 gaming tables. Source: Galaxy Entertainmet
GALAXY ENTERTAINMENT: Rio Casino & Hotel
It is within walking distance of the Hong Kong-Macau Ferry Terminal and 15-minutes from Macau International Airport by car. It has 449 rooms.Source: Galaxy Entertainment
Photo Source: AP
SJM HOLDINGS: Surge in share price in 2010
CEO: Dr. Ambrose So Ticker: HKG
Macau Properties: Grand Lisboa, Casino Lisboa, Casino Oceanus at Jai Alai, Casino Ponte 16, Casino Babylon, Casino Casa Real, Casino Lan Kwai Fong Macau, Casino L’Arc Macau, Casino Macau Jockey Club, Casino Golden Dragon, Casino Kam Pek Paradise
The company experienced a 182% increase in its share price on the Hong Kong Stock Exchange in 2010.
SJM also recaptured lost market share throughout the past year, averaging 31% of the far larger market, up from 28% in 2009.
Expansion Plans: It is having some difficulty with government permits but it plans to add two more sites in Cotai.
SJM HOLDINGS: Grand Lisboa
SJM HOLDINGS: Casino Babylon
It has 120 gaming machines and 45 gaming tables.Source: SJMHoldings
SJM HOLDINGS: Sofitel Macau at Ponte 16
The 20-story hotel has over 400 rooms.Source: SJMHoldings
SJM HOLDINGS: Casino Lan Kwai Fong Macau
It has around 200 rooms and is within walking distance of many of the other casinos.Source: SJMHoldings
SJM HOLDINGS: Casino L’Arc Macau
It opened in 2010.
SJM HOLDINGS: Casino Macau Jockey Club
WYNN RESORTS: Wynn Macau has double the revenue of its Las Vegas parent company
CEO: Steve Wynn Ticker: NASDAQ:WYNN
Macau Properties: Wynn Macau
The company’s high-quality management and its financial strength – its net debt is less than $13 million – sets it apart from its competitors. Wynn Resorts has been able to maintain a mid- to high-teen market share in Macau. It is expected to hold onto a 15% share despite facing more competition.
Expansion Plans: Wynn Resorts will be building a new property in the Macau, Wynn Kotai, which is expected to be completed by 2014-2015.
Wynn Resorts could reach a market cap of $345 million this year.
WYNN RESORTS: Wynn Macau