[ET Net News Agency, 17 November 2017] On 29 January 2018, MGM Cotai will open with
1,400 hotel rooms, 14 F&B outlets, and mass gaming. Five major junkets have agreed to open
rooms and will progressively open from end of 1Q 2018 to end of 2Q 2018, Morgan Stanley
noted.
Skylofts mansions (27 in total), the key to drive VIP business, will open by mid-2018.
MGM China (02282) plans to transfer 400 staff and 50-60 tables from Peninsula to Cotai,
saving US$20mn p.a. at Peninsula, and Cotai will have about 5,500 staff.
Like its peers, MGM China may experience a slow rampup in 1H 2018 due to the progressive
opening, but the research house thinks investors will look beyond this and focus on EBITDA
run-rate in 2018/19 and after, potentially doubling current EBITDA.
On Morgan's 2019 estimates, MGM China is trading at 11x EV/EBITDA with a 5% dividend
yield, more attractive than peers. MGM China has remaining capex on Cotai of US$400mn in
2018.
Morgan maintained its "overweight" rating on MGM China, with a target price of HK$23.
(KL)