澳门新葡亰手机版 > 财经证券 > Macau Gaming:Liquidity controls may hurt share prices;stay s

原标题:Macau Gaming:Liquidity controls may hurt share prices;stay s

浏览次数:135 时间:2019-10-13

澳门新葡亰手机版,Top junket warned clients of potential banking issues: US gaming names cameunder pressure on Friday night – dropping on average 2% – following media reportsclaiming that one of Macau’s top junket operators alerted clients of potential bankingissues. An article in Benzinga on 14 July says that the junket operator reminded clientsin a closed network SMS transmission to be more careful when utilising Chinese banksfor transactions as they could be targeted by local authorities in China’s ongoingcrackdown on capital flight. According to the article, the junket operator issued the alertafter one or more accounts were frozen due to suspicious transactions.

    Capital flight controls are a known risk; too early to tell the impact: Capitaloutflow restrictions imposed by China’s government are part of an ongoing effort tostem capital flight from the country. From this perspective, the freezing of bankaccounts due to suspicious activity is a known risk. We think the junket operatorinvolved may have issued this alert to clients, as it is concerned that some playersmay use recent reports of capital outflow restrictions as an excuse to delayrepayments, as happened two years ago. By reminding clients of these issuesproactively, the junket operator may be hoping to prevent history from repeating itself.

    Based on our observations, the crackdown on capital flight has so far had nodiscernible effect on the performance of the gaming sector. However, it will probablytake another 1-2 weeks to gauge the impact of this latest news; it is possible thatsome clients may become less active in the near term in light of this development.

    Stay selective: We think capital flight control is an ongoing risk, but genuine demandand abundant liquidity continue to serve as a foundation for growth through 2H17e.

    The sector’s valuation is not demanding at 13x one-year forward EV/EVITDA. Shareprice weakness should be seen as a good opportunity to accumulate the sector’squality names. We continue to prefer Galaxy (27 HK, Buy) for its defensiveoperations and attractive valuation (trading at 12x FY18e EV/EBITDA). Theupcoming 2Q17 results could be a catalyst for the stock in the near term, in our view.

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