Investment management firm The Capital Group Companies Inc has invested HKD166.5 million (US$21.3 million) to boost its stake in Macau casino operator Wynn Macau Ltd.
In late November, The Capital Group bought an additional 9,496,400 shares in Wynn Macau Ltd for an average price of HKD17.537, raising its stake in the casino operator to 8.11 percent, from a previous holding of 7.93 percent. The group controls its stake in Wynn Macau Ltd via a number of its subsidiaries.
U.S.-based casino operator Wynn Resorts Ltd owns a 72.16-percent stake in Wynn Macau Ltd. The Capital Group is the second largest shareholder in Wynn Macau Ltd, according to shareholding disclosures on the Hong Kong Stock Exchange.
The Capital Group operates as an investment management firm. The U.S.-based company offers portfolio management and advisory services to clients worldwide, currently managing more than US$1.8 trillion, according to its corporate website.
In a November report – which looked in detail at the prospects of Wynn Resorts Ltd and Wynn Macau Ltd – brokerage Sanford C. Bernstein Ltd said too much investor focus generally had been on the volatile VIP gambling segment, and not enough on the premium mass one.
The institution suggested the premium-mass segment was more representative of China’s underlying growth and the outlook for discretionary spending by Chinese consumers. It estimated that – despite the Wynn brand’s reputation for specialising in VIP play – the VIP gaming segment would contribute only approximately 20 percent of Wynn Macau Ltd’s earnings before interest, taxation, depreciation and amortisation in 2019.
“Both Wynn Resorts and Wynn Macau are trading at compelling price levels that represent great entry points, which allow investors to own premier global gaming assets with asymmetrical risk/reward set-ups,” said at the time the Sanford Bernstein team.
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"The idea that VIP [in Macau] would revert to its previous levels, I think that it’s clearly foregone, it’s not going to happen. But I anticipate that … the premium-mass and mass will be stronger than it has ever been”
Chief executive of Wynn Resorts