Casino services firm China Star Entertainment Ltd wants to focus its operations on gaming in Macau, the company said in its results report for the half year to June 30.
The Hong Kong-listed company disposed of several non-gaming subsidiaries during the period, “to focus its resources on its high return businesses such as the hotel and gaming services operations and other gaming-related services businesses in Macau,” China Star stated.
The firm disposed of China Star Movie Ltd, a unit engaged in film production, and Star Hope Investments Ltd, involved in property investment in Hong Kong.
China Star also sold Ace Season Holdings Ltd, a firm selling traditional Chinese medicines and other pharmaceutical and health-related products.
At the same time, the company is stepping up its exposure to the gaming industry in Macau, namely through profit-sharing arrangements with VIP junket operators. It is preparing to buy an equity interest in the profit stream from Macau junket operator Eight Elements Entertainment Ltd.
The company also entered into loan agreements with three junket operators earlier this year. These deals “provided the group with a long period of time to negotiate the terms and conditions of acquisition of those junket companies… and to consider whether to invest in those junket companies, in addition to stable and regular interest income,” said Thursday’s filing.
China Star already has an equity interest in the profit stream from Ocho Sociedade Unipessoal Lda, a junket promoter marketing one of the VIP rooms at SJM Holdings’ Grand Lisboa casino hotel. But the firm said in its report that Ocho has “lost its competitive advantage” since many of its agents and customers have been “attracted by other large and well-equipped new hotels and casinos in Macau”.
China Star controls Hotel Lan Kwai Fong Macau and its casino, in downtown Macau. The gaming venue operates under a licence from SJM Holdings Ltd.
The firm recorded a turnover of HKD601.7 million for the first six months of 2014, a decrease of 5 percent in year-on-year terms. About 99 percent of the turnover amount was generated from Hotel Lan Kwai Fong Macau and its casino. At the end of June, the venue had 84 gaming tables and 128 slot machines.
Net profit for the period for China Star amounted to HKD114.8 million, a jump of 86 percent from the same period one year earlier. The increase was mainly attributable to a substantial decrease in impairment loss recognised in respect of intangible assets related to Ocho.
The company did not recommend a dividend.
Mar 03, 2021The Macau government collected nearly MOP3.21 billion (US$402.1 million) in tax revenue from the city’s gaming industry for the first month in 2021. That figure was down 63.6 percent compared...
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