Wynn Palace likely took 1Q Macau mass share: Aegis
Wynn Palace (pictured), the recently-opened Cotai casino property of Wynn Macau Ltd, may have taken first-quarter mass-market share from its rivals, with help from factors including new teams of player hosts and better bus links, said a Thursday note from analyst David Bain, of Aegis Capital Corp.
“We raise first-quarter 2017 Wynn Palace mass market share assumptions +30 basis points to 5.9 percent, indicating a 50 basis points quarter-on-quarter market share increase,” stated Mr Bain.
He added that factors helping the improvement included “the hiring and implementation of new host teams to increase premium mass play,” a reference to a segment of mass-market players betting high minimums in cash rather than via the credit used for traditional VIP play.
Other things assisting Wynn Palace in the first three months of the year were the venue “joining the Cotai Connection busing program (1,000 additional patrons per day) as well as [making] its own bus additions, and reconfiguration of the casino floor providing more energy as well as other smaller property improvements,” wrote Mr Bain.
Cotai Connection is an industry-provided private bus service on a circular route, linking a number of otherwise competing casino properties on Cotai.
After Wynn Palace launched in late August last year, a number of investment analysts had mentioned the ramp up of casino business had been slower than market expectations, affected in part by – at that time – limited mass-market appeal of the property, and its location to the east of the Cotai Strip.
Brokerage Daiwa Securities Group Inc said in a Wednesday note, referring to earnings before interest, taxation, depreciation and amortisation (EBITDA): “We expect Wynn Macau [Ltd] to grow by 21 percent quarter-on-quarter to US$275 million (+43 percent year-on-year), supported by the development of Wynn Palace’s mass business and normalisation of its VIP win rate.”
Daiwa analysts Jamie Soo and Adrian Chan added, regarding the general outlook for Macau operator EBITDA in first-quarter earnings season, due to begin next week: “On a sequential basis, we expect Wynn Macau [Ltd] and Melco Resorts [and Entertainment Ltd] to outperform industry peers in first quarter 2017, helped by the ramp up of Wynn Palace while Melco Resorts’ Studio City had its first full-quarter contribution from its VIP business (which started in November 2016).”
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