Suncity listco focusing on fastest return schemes: Chau

Sep 24, 2021 Newsdesk Latest News, Philippines, Rest of Asia, Top of the deck  

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Entrepreneur Alvin Chau Cheok Wa (pictured in a file photo) says publicly-listed Asian casino resort investor Suncity Group Holdings Ltd aims at “prioritising projects with the highest and fastest returns.” The firm will “remain pragmatic” and “flexibly adjust the scale and speed of development,” amid the “challenging times” created by the Covid-19 pandemic, he added.

The message, dated August 31, was in Suncity Group Holdings’ interim report, filed in Hong Kong on Thursday.

Prior to the Covid-19 pandemic, Mr Chau’s core business interest had been Suncity Group, a privately-held investor in Macau casino junkets. A number of investment analysts has said the Macau VIP segment has been recovering from pandemic-related disruption at a slower pace than the Macau mass market.

Before the pandemic crisis, the listed entity Suncity Group Holdings had ventured into investment in casino development and operation in other parts of the Asia-Pacific region. The projects include: Hoiana in Vietnam; Tigre de Cristal, near Vladivostok in the Russian Far East, via the group’s investment in Summit Ascent Holdings Ltd; and most recently at the under-construction Westcity City scheme in the Philippine capital, Manila.

Mr Chau said in his chairman’s message: “We focus on the maximisation of cash flows from our operating properties through continued implementation of cost-reduction and efficiency initiatives; some of which have become permanent savings.”

He added: “In each of our properties, we manage costs carefully without affecting customer experience.”

The chairman noted that Tigre de Cristal had delivered “fair results” in the first half, generating a positive adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of HKD17.2 million (US$2.2 million), “thanks to solid local mass and slots business”.

Hoiana, which has a foreigner only casino, and where inbound tourism to Vietnam has been restricted due to the pandemic, had been “running at its lowest cost ever,” stated Mr Chau, adding “we are pleased that our stakeholders continue their support towards Hoiana”.

Mr Chau said that the listco’s “core strategy is to preserve cash and liquidity while retaining flexibility to adapt to the challenges brought by the pandemic and changing market conditions.”

On August 31, Suncity Group Holdings reported it had swung to a CNY209.0-million (US$32.3-million) profit attributable to shareholders in the first half, compared to a CNY118.6 million loss in the prior-year period.

The interim profit was supported by a gain of approximately CNY167.9 million from the disposal of Access Achievement Ltd, a mainland China property business.

Suncity Group Holdings stated in its interim report the group maintained “a flexible stance in raising capital, such as selling the legacy real estate segment for cash; as well as selling land plots to secondary developers to speed up future phases” of property development.

It added: “By using a multi-jurisdiction approach, the group is also able to diversify our geographic-related risks, deploying capital flexibly to the jurisdiction with the most attractive returns.”

Suncity Group Holdings issued a warning to the Hong Kong bourse, in its August 31 filing, of “material uncertainty” related to its ability to continue as a “going concern”, due to the modest volume of its cash flow, versus its capital commitments.

In other news, on September 20, Mr Chau was quoted in the Hong Kong media, as saying the Macau government’s suggested further regulation of the city’s junket operators, as part of plans to revise Macau’s gaming law, was not designed to “drive out” junkets from the local market.

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