CAMBODIA

Naga2 helps group’s stock to shine

NagaCorp was the best-performing gaming stock in 2018 and there is no sign of its star fading yet, as its well-received Naga2 property continues to pull in the crowds and the group plans for further expansion.

The operator of Cambodia’s NagaWorld, posted a 53 percent increase in net profit for 2018 as all business segments reported strong growth, led by VIP gaming.

Gross gaming revenue was up by 55 percent to $1.4 billion, while earnings before interest, tax, depreciation and amortization surged 60 percent to $511.8 million. Net profit was $390.6 million.

VIP rollings were particularly strong, up 69 percent to $35.7 billion, after the opening of Naga2 in late 2017.

The new property significantly increased the quality and range of VIP, mass gaming and non-gaming offerings, providing the group with a product comparable in quality to integrated resorts in more established gaming destinations. Macau’s major junkets have taken note. Suncity opened in Naga2 in March 2018 and will be moving to a “larger and more desirable” location in the first quarter of this year. The company says it expects all four of Macau’s biggest junkets to be operating out of the property this year.

“Despite the significant increase in VIP business volume, VIP customer composition remains well diversified between South East Asia and North Asia,” it said.

Mass Market table buy-ins increased by 57 percent to $1.2 billion and mass market electronic gaming machines bills-in increased by 22 percent to $2.2 billion.

Naga said the volume growth was mainly due to increased visitation from China, which saw a gain of 69 percent in the first eleven months of last year and holds strong potential for further expansion.

Union Gaming said it was increasing its price target for the company on the back of the results

“NagaCorp, which has consistently been one of our top picks, continues to beat expectations as demand remains very robust across all gaming segments and across both properties,” analyst Grant Govertsen wrote in a note.

“Naga, which was the best performing gaming stock globally in 2018, remains a top pick of ours, and we expect Naga2 to continue to ramp closer to its full potential over the course of 2019.” Union Gaming raised its PT to HK$12 (from $10) and reiterated a Buy rating.

NagaCorp said its plans for an IR in Vladivostok are progressing and it expects the project to be broadly on track for completion this year. It also reiterated it is in the advanced planning stages for Naga3 in Cambodia to take advantage of growth opportunities there.

Cambodia’s casino industry continued to enjoy stellar growth in 2018, with a 53 percent increase in licenses granted during 2018. There are now 150 licenses, up from 98 the prior year. The majority of the activity was centered on the coastal town of Sihanoukville, which now has 88 licenses granted, fuelled by inbound Chinese investment.

Operators in Cambodia are waiting for the government to publish long-awaited legislation, which is expected to improve the regulatory framework and further drive foreign investment.

Bomb found in Poipet casino

A bomb was reportedly found at a casino in Poipet in February, leading to a swift response from local police and the Cambodian bomb squad.

According to a report from Cambodia News English, a man found the suspect device in a styrofoam box in the washroom at the Golden Crown Casino in Poipet City and alerted the casino’s security.

Arriving at the scene was local police and the Cambodian Mine Action Centre (CMAC), an organization dedicated to removing mines across the nation. An official from the CMAC who was at the scene has confirmed that the bomb was real.

Star Vegas property EBITDA improves

Australia-listed Donaco International said property EBITDA at its Star Vegas resort improved in Q4, helped by a higher win rate. Star Vegas Resort and Club recorded VIP turnover of THB 17.1 billion (US$543.7 million), and net revenue of THB 421.3 million, compared with VIP turnover of THB 26 billion, and net revenue of THB 470.3 million in the prior quarter.

The win rate was 3.27 percent up from 2.47 percent, with EBITDA rising to THB181 billion, from THB169.4 million reported in the four months to October 2018. Donaco said it has become aware of increasing competition in the Poipet area, with a new casino rumored to be opening soon.