The year 2014 was a challenging one for the six Macau-based casino operators, as their stock prices took a huge beating in Hong Kong trading.
All the six firms saw their market capitalisation decrease by at least one third in 2014 according to data from Reuters, as the relatively lacklustre performance of the Macau gaming sector – compared to previous years – led to sell offs by some investors.
Monthly gross gaming revenue in Macau has been decreasing since June as measured in year-on-year terms. Data from the city’s gaming regulator, the Gaming Inspection and Coordination Bureau, shows that GGR for the first 11 months of 2014 stood at MOP328.2 billion (US$41.1 billion), up by a mere 0.3 percent in year-on-year terms.
SJM Holdings Ltd had the worst stock performance among Macau-based casino operators in 2014. The value of its stocks went down by 52 percent – they were worth just HKD12.36 (US$1.6) per unit at the end of Wednesday’s trading day in Hong Kong.
MGM China Holdings’ stock price went down 39 percent in 2014, ending the year at HKD19.72.
Sands China Ltd saw the price of its shares also go down – by 39 percent. The shares, which peaked at more than HKD65 in early March, closed the year at HKD38.15.
Wynn Macau Ltd’s stock price dropped by almost 38 percent in 2014, closing the year at HKD21.85 per unit.
Galaxy Entertainment Group Ltd’s performance was similar – a decrease of 36 percent in 2014, ending the year valued at HKD43.65.
Melco Crown Entertainment Ltd’s Hong Kong shares typically trade at much lower volume than do those it has listed on Nasdaq in New York. The firm’s Hong Kong stocks posted a price drop of 35 percent during 2014, ending the year at HKD65.75 at the close of trading on Wednesday.
Nonetheless, despite the swathes of red for Macau names latterly in 2014, one investor’s loss is potentially another investor’s opportunity. Provided there are no further major changes in Macau market fundamentals during 2015, the current lower share prices could well open up the market to new buyers in the year ahead.
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“We expect Las Vegas Sands to not have any material change in strategy. The focus remains developing Macau and Singapore”
Vitaly Umansky, Kelsey Zhu and Tianjiao Yu
Analysts at brokerage Sanford C. Bernstein