Privately-held casino junket business Suncity Group has “so far” only seen its rolling chip volume recover to “approximately 20 percent of pre Covid-19 levels in Macau,” says a Monday memo from Goldman Sachs (Asia) LLC.
The note, by Hong Kong-based analysts Simon Cheung, Alpha Wang, and Carrie Jiang, was issued after the institution held a ‘Gaming and Conglomerates Corporate Day’ on Friday.
The Goldman Sachs team stated, referring to comments it attributed to a Hong Kong-listed entity associated with the Suncity brand, namely Suncity Group Holdings Ltd: “Suncity commented that the pace of VIP recovery has so far been behind expectation. In response to the soft market conditions, it has decided to close down VIP rooms in Australia, [South] Korea and selective [ones] in Macau, i.e., Parisian [Macao].” The latter property is operated by Sands China Ltd.
The institution suggested that VIP gross gaming revenue (GGR) in the Macau market as a whole, only recovered to circa 20 percent of pre- Covid-19 level in December, “lagging behind” the overall Macau GGR recovery pace for that month, which had moderated its year-on-year contraction to just under 66 percent market wide.
Goldman Sachs said that the Suncity brand’s “bookings for the Chinese New Year holiday by its VIP customers are also relatively light”.
“Overall, the group is taking the view that the Asia VIP gaming market will take time and only recover gradually,” added the analysts.
High-roller players served in the Macau market by the Suncity brand had found it “quite troublesome to return” to the city, said Goldman Sachs, citing Suncity commentary.
The institution mentioned issues such as suspension in mainland China of self-service kiosks that could otherwise be used to make applications for a Macau trip using a mainland exit visa under the Individual Visit Scheme for independent travellers.
Goldman Sachs also flagged as a consumer barrier mentioned by Suncity, the need to undergo a Covid-19 test and show a valid certificate, in order to seek quarantine-free entry to Macau from the mainland.
Nonetheless, said the institution, the Suncity brand had “no intention” of changing its strategy of “expanding into overseas markets in the next two to three years, i.e., building [its] own integrated resorts across Asia outside of Macau”.
The brand had “delayed the grand opening of the Vietnam casino, Hoiana, till second half 2021,” a property where the Suncity listco is an investor.
Last week, the Suncity brand said work on Hoiana’s phase two would start this year.
Goldman Sachs added Suncity Group Holdings – via its investment in Hong Kong-listed Summit Ascent Holdings Ltd – “continues to operate Tigre de Cristal in Vladivostok,” Russia, and was pursuing “the construction work“ of a casino resort project in Manila.
In Vladivostok, the Suncity brand had budgeted to spend US$200 million for the phase three upgrade of Tigre de Cristal, noted Goldman Sachs.
In the Philippines, the casino resort project “will cost US$1.2 billion and is expected to be completed in 2023,” said Goldman Sachs. “Altogether, the [Suncity] group would operate 680 gaming tables, 4,000-plus hotel rooms, and 3,800-plus slot machines by 2024 across all properties in Asia,” added the institution’s analysts.
Aug 02, 2021Macau’s casino gross gaming revenue (GGR) in August is likely to be negatively affected “as new Covid-19 cases [are] spreading across China,” says brokerage Sanford C. Bernstein Ltd. August’s...
Aggregate Macau casino gross gaming revenue in July