The recently-expanded involvement of Hong Kong-listed Suncity Group Holdings Ltd in Summit Ascent Holdings Ltd, promoter of a Russian casino venue, will be a “significant positive” for that resort. So said Eric Landheer, an executive director of Summit Ascent, in comments to GGRAsia.
Suncity Group Holdings is controlled by Alvin Chau Cheok Wa, boss of the privately-held Suncity Group, considered by a number of investment analysts to be the largest-single contributor to VIP gambling junket betting volume in the Macau market.
Summit Ascent, a firm also quoted on the Hong Kong bourse, is the vehicle for investment in the Tigre de Cristal casino resort near the Pacific port of Vladivostok in the Russian Far East. The venue has been targeting players from neighbouring China and other markets in East Asia.
Summit Ascent’s Mr Landheer told us: “We believe that Suncity will take an active role in, and have a significant positive impact on, the growth of our VIP business, and that their experience as the premier VIP operator in the world will enable us to enhance our offerings to suit their extensive client base,”
Ten days ago Suncity Group Holdings said it had increased its interest in the stock of Summit Ascent, to approximately 27.97-percent. A few days later, Summit Ascent said Andrew Lo Kai Bong, an executive director of Suncity Group Holdings, had been promoted to deputy chairman and an executive director of Summit Ascent. Anthony Chiu King Yan, currently the chief financial officer of Suncity Group Holdings, was at the same time named as an executive director at Summit Ascent.
Mr Landheer said the Suncity brand was expected to have significant input into a planned phase two for Tigre de Cristal. Summit Ascent had mentioned in its 2018 results filed in March, that the extension would add hotel rooms, gaming tables and slot machines, and more restaurants and bars, an “indoor beach club”, and a “premium outlet mall”. The firm noted at the time that it was targeting an opening “in the summer of 2021”.
Phase two delay hint
Mr Landheer hinted to GGRAsia that Suncity’s involvement might mean a delay to that phase-two timetable – although stressed that was not certain.
He told us: “Suncity will obviously have significant input into the design, construction and the management of Tigre de Cristal’s phase-two project. Now this could potentially impact the time frame for completion as we ensure that we build the first-class product that will suit the VIP clientele, and help the company [Summit Ascent] to further ramp up VIP business in partnership with its new largest shareholder.”
Mr Landheer clarified the topic of a potential impact to the timetable for phase two by saying: “… we have not made an announcement as such, and there are no plans at this point to delay that [phase two timetable]; but it would be reasonable to have that expectation”.
In its 2018 results filing, Summit Ascent said its mass table business had supplanted the rolling chip business as the main revenue contributor at Tigre de Cristal during the reporting period. Mass gaming revenue had increased by 26 percent year-on-year to HKD166.9 million (US$21.3 million).
The firm’s rolling chip turnover declined from approximately HKD18.79 billion in 2017 to about HKD15.56 billion in 2018. Net win after all commissions rebated directly or indirectly to customers from rolling chip business decreased by 35.5 percent year-over-year to HKD109 million in 2018.
Mr Landheer said that currently, the VIP operation at the Tigre de Cristal property was supported by some junket operators from Macau and what he termed “casual” junkets.
Suncity Group Holdings – which does not include any profit streams from Macau gambling junkets in its filed accounts – has been increasing its gaming investments into markets beyond Greater China. That is both in terms of new-build resorts such as Hoiana in Vietnam, due to open later this year; and in terms of deals to manage third-party-controlled properties in other markets, such as Cambodia.
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Vitaly Umansky, Eunice Lee and Kelsey Zhu
Sanford Bernstein analysts