Daiwa Securities Group Inc says it is hard to estimate the impact that the investigations into businessman Cheung Chi Tai will have to Macau’s casino industry.
Mr Cheung, once one of the biggest shareholders in junket operator Neptune Guangdong Group, is currently under a money-laundering probe launched by the Hong Kong police, the Wall Street Journal reported. As a result, seven of his closely held companies and himself have had their assets frozen, the report added, but noting that Mr Cheung hadn’t been accused of any wrongdoing.
Neptune Guangdong Group’s management told the Wall Street Journal that Mr Cheung was no longer associated with the group, including the private entity operating as a junket and the Hong Kong-listed firm, Neptune Group Ltd.
He “owned as much as 17.4 percent of Neptune in 2007, but has had no stake in the Neptune’s listed company since January 2014,” Hong Kong-based Daiwa analysts Jamie Soo and Adrian Chan wrote in a note on Thursday.
“Based on our conversations with industry participants, the junket itself has an intricate shareholding/ownership structure (which varies depending on property and VIP rooms) so it is very difficult to determine which part of the business will be affected by this [money-laundering probe],” the Daiwa analysts wrote.
Mr Cheung was previously identified as a high-ranking triad figure in a 1992 U.S. Senate subcommittee report on Asian organised crime.
Daiwa said in Thursday’s note that Neptune Guangdong Group is one of Macau’s top junket operators, with a market share of about 10 percent.
Mr Soo and Mr Chan added: “Based on our research of the junket market, the junket operator (as a group) has over 180 tables in Macau. Among the casino operators, MGM [China Holdings Ltd] has the highest exposure, versus the other casino operators, with over 20 percent of its VIP tables allocated to the junket operator, by our count.”
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"We forecast Grand Lisboa Palace will have EBITDA of HKD2.0 billion (US$260 million) with 330 tables by 2022, and HKD3.5 billion with 380 tables by 2023"
Credit rating agency Fitch Ratings