Riding on Macau’s successful brand name. Melco Crown (Philippines) Resorts (MCP PM, Not Rated) announced that its casino resort at Entertainment City in Manila will be branded after its successful Macau flagship, City of Dreams. MCP is a 65% subsidiary under Melco Crown. The casino will be completed by mid-2014, targeting a niche segment within the burgeoning middle-class market. Consequently, the expected capital expenditure will be increased by 10% or USD60m to USD680m.
51% increase in approved table supply. The casino resort has received approval from PAGCOR to house 365 tables, 1,680 slot machines and 1,680 electronic tables – a 51% increase and 232% from the previous 242 tables and 1,450 electronic gaming machines (slot and electronic tables), after the local regulator enacted revisions to three separate regulations on the Casino Regulatory Manual, namely, on the casino layout, gaming tables and electronic gaming machines sections.
Synergistic partnership with Crown. Capitalising on the synergistic partnership with Crown, the company will add 260 Crown branded rooms within the Crown Towers Hotel, which is targeted at the premium high-end market. The resort will also house at least 640 rooms in five other hotel towers under distinct fi ve-star luxury hospitality brands.
Reiterate BUY, TP HKD25.60. Maintain BUY on Melco Int’l with a target price of HKD25.60. Melco Int’l is the only Macau gaming operator with exposure to emerging gaming markets, namely, the Philippines and Russia. The company is branching out beyond Macau’s shores together with Summit Ascent (102 HK, Not Rated) in a venture to pioneer the opening of a new casino in Vladivostok, Russia. The casino will be completed by Sep 2014 under 5% and 46% ownership for Melco Int’l and Summit Ascent.