Two company C-level executives will continue to play an operational role at Macau casino operator MGM China Holdings Ltd and either of them could step in as company leader after the retirement – announced on Monday – of the group’s chief executive Grant Bowie, noted several brokerages in memos issued that day.
“MGM China appointed joint-presidents last year via internal promotions, Kenneth Feng (president and chief strategic officer) and Hubert Wang (president of hospitality and chief financial officer), who will continue to take operational leadership roles after Mr Bowie’s resignation, we believe,” wrote JP Morgan Securities (Asia Pacific) analysts DS Kim, Derek Choi and Jeremy An.
“Thus we do not necessarily see any major changes in [MGM China's] operation/strategy” with the news of Mr Bowie’s departure, they added.
Sanford C. Bernstein Ltd said in its memo on the topic, that Messrs Feng and Wang were potential candidates to replace Mr Bowie.
It noted Mr Wang had been with the company since 2011 and had had a “long career in the gaming industry” in Macau and the United States.
“While he has served in the senior finance role for some time, his operating experience has been more limited, only putting on the hospitality hat in 2019,” stated Sanford Bernstein analysts Vitaly Umansky, Eunice Lee and Kelsey Zhu.
The institution noted that Mr Feng had also been involved with the parent MGM Resorts International’s joint venture with Diaoyutai State Guesthouse, a government-owned hospitality company in mainland China.
“We do not expect an external candidate to come in to run MGM China,” said Sanford Bernstein, although the institution said it was “a bit perplexing” that the company did not name a successor at the same time as announcing Mr Bowie’s departure.
Whoever comes in, will need to steer the business through an expected public retender for Macau gaming rights, linked to the expiry in June 2022 of the city’s six current concessions and sub-concessions.
“In the end, another candidate,’ other than Mr Wang or Mr Feng “may emerge, but either one is a potential for the CEO,” Sanford Bernstein stated.
Both institutions suggested the ramp up of MGM Cotai business prior to the Covid-19 crisis had not been as robust as the market had hoped.
JP Morgan noted there was an opportunity for a “gap” in MGM China’s stock performance/valuation versus peers to “narrow as we come out of the Covid-19 crisis”.
Mr Bowie joined MGM China’s Macau concession-holding entity MGM Grand Paradise SA in August 2008 as president, and went on to oversee the ramping up of business at MGM China’s first Macau property, MGM Macau, as well as leading the construction and opening in February 2018 of the second resort MGM Cotai. He will retire on May 31, which analysts said was about half a year before the expiry of his current contract.
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