The dive in Macau casino stock values in the latter part of 2014 has contributed to billions of U.S. dollars being wiped from the fortunes of some of the sector’s best-known entrepreneurs, according to Forbes’ latest ‘Hong Kong’s 50 Richest People’ list, published on Friday.
Many of the people concerned hold their wealth largely via equity holdings in casino firms they founded or run.
An estimated US$7.6 billion was erased from the fortune of Lui Che Woo (pictured), founder and chairman of gaming operator Galaxy Entertainment Group Ltd. His net worth dropped from an estimated US$21 billion in January 2014 to US$13.4 billion in January this year, Forbes said. Mr Lui slipped from 2nd to 5th place on Forbes’ list.
Galaxy Entertainment’s stock fell 36 percent in 2014 from its value as of end-2013, according to data from Reuters.
All six Macau casino firms saw their market capitalisation decrease by at least one-third in 2014.
Pansy Ho Chiu King, co-chairperson of MGM China Holdings Ltd, saw her personal fortune slip by an estimated US$1.8 billion in that period, to US$5 billion, according to Forbes.
Ms Ho, a daughter of Macau casino tycoon Stanley Ho Hung Sun, went from 9th place in 2014 to 12th place in January 2015. She is also managing director of Hong Kong-listed shipping and property conglomerate Shun Tak Holdings Ltd, which runs the TurboJet ferry operation serving routes between Hong Kong and Macau. The group also has significant real estate interests in Macau.
A significant portion of her wealth comes from her share of the proceeds from the US$1.5-billion MGM China stock flotation in Hong Kong in June 2011 as well as her current approximately 27 percent holding in MGM China.
One of Ms Ho’s siblings, Lawrence Ho Yau Lung, co-chairman of Melco Crown Entertainment Ltd, saw his net worth decline by US$1.4 billion, to US$2 billion.
A number of investment analysts say Melco Crown’s stock price could benefit this year from the planned opening of its majority-owned US$2.3 billion Studio City casino resort on Cotai in Macau. Mr Ho also controls Summit Ascent Holdings Ltd, a Hong Kong-listed firm that is building a casino resort in Russia’s Far East. The venue is also due to open this year.
Nonetheless, Mr Ho’s Forbes ranking for Hong Kong’s wealthiest people dropped from 12th place in 2014 to 31st today.
Angela Leong On Kei, fourth consort of Stanley Ho and a director of SJM Holdings Ltd – the market-leading gaming operator he founded – saw her net worth drop by US$1.05 billion, to US$1.8 billion, said Forbes. She went from 19th place to 36th position.
Pollyanna Chu Yuet Wah, chief executive of Hong Kong-listed Kingston Financial Group Ltd, saw her net worth stable at US$1.6 billion, compared to her estimated net worth on another Forbes list – ‘Asia’s 444 Richest People’ – published in March 2014.
Financial services firm Kingston in 2005 bought the Casa Real casino hotel on Macau peninsula. It also operates the Grandview on Taipa. Both are run via the gaming licence of SJM Holdings.
Cheng Yu Tung is now the highest-placed among those entrepreneurs with sizeable casino interests on ‘Hong Kong’s 50 Richest People’ list, with a net worth estimated at US$15 billion.
His wealth is more diversified than some of the other casino investors, although he also saw US$1.2 billion swiped from his fortune since his appearance on ‘Asia’s 444 Richest People’ in 2014. Still, Mr Cheng rose to 3rd from 5th on the ‘Hong Kong’s 50 Richest People’ list.
The businessman is perhaps best known to the public for heading the retail chain Chow Tai Fook Jewellery, part of Hong Kong-listed Chow Tai Fook Jewellery Group Ltd. Mr Cheng is a long time business associate of Stanley Ho, becoming during the 1980s an investor in Sociedade de Turismo e Diversões de Macau SA (STDM). For four decades until 2002, STDM was the holder of a Macau casino monopoly.
Last year, Mr Cheng’s family showed interest in investing in Macau junket investor Suncity International Holdings Ltd. Meanwhile, one of his firms in November reportedly signed a letter of intent to invest US$1.6 billion to create a new South Korean casino resort at Incheon, near the country’s capital Seoul.
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”We expect Goa to quickly become a US$1 billion market as it transitions to land-based casinos (from US$150 million today), which is still just a fraction of India’s total GGR potential of US$10 billion to US$17 billion”
Analyst at Union Gaming Securities Asia