Sjm Holdings Ltd

  • Ticker880
Jack Goh Tooan Orng ... (+3)
  • Jack Goh Tooan Orng
  • Robin Yuen
  • Vincent Khoo Boo Aik
M04 MGM China Holdi... (Travel & Leisure)
G13 Genting Singapo... ... (+7)

Regional Gaming – A compelling wager for 2021; Bigger rewards in 2022

We expect gaming stocks to chart an upward trend as valuations re-rate to factor in the eventual business normalisation trends with the gradual global dispensation of COVID-19 vaccines throughout 2021. ASEAN gaming stocks are clearer beneficiaries. However, Macau gaming stocks’ recoveries would be dampened by China’s clampdown on money-laundering and uncertainties tied to the concession renewal terms. Maintain MARKET WEIGHT with top picks being GENS and GENM.

Robin Yuen
  • Robin Yuen

SJM Holdings (880 HK): 2Q20: A local hero in a land with no visitors

SJM’s tier 2 casinos helped propel SJM’s market share to 30% in 2Q20, as the local gamblers patronised slots and grind-mass games. Unfortunately, management expects no material benefit from the 15 July border relaxations for 3Q20. Grand Lisboa Palace remains on schedule to open at end-20, but a full ramp-up is shaping up to be an elusive outcome. Maintain HOLD and target price of HK$7.00. Entry price: HK$6.50.

Joyce Chan Pui Lai ... (+5)
  • Joyce Chan Pui Lai
  • Robin Yuen
  • Julia Pan Mengyao
  • Zhifeng Shen
  • Ken Lee
N1U New Oriental Ed... (Food & Beverage)
600519 Kweichow Moutai... (Retail) ... (+4)

Greater China Daily: Wednesday, July 29, 2020

KEY HIGHLIGHTS Initiate Coverage Fuyao Glass (3606 HK/BUY/HK$22.15/Target: HK$27.00) Consolidator of the global auto glass industry. Initiate coverage with BUY. Target price: HK$27.00. Results Kweichow Moutai (600519 CH/BUY/Rmb1,670/Target: Rmb1,938) 1H20: Improving cash flow status. Upgrade to BUY. New Oriental Education & Technology Group (EDU US/BUY/US$139.75/Target: US$162.00) 4QFY20: Near-term headwinds; expect a full recovery in 2HFY21. SJM (880 HK/HOLD/HK$8.16/Target: HK$7.00) 2Q20 A local hero in a land with no visitors. TRADERS’ CORNER CG Services (6098 HK): Trading Buy Range...

Ivy Xu Da ... (+2)
  • Ivy Xu Da
  • Robin Yuen

SJM Holdings (880 HK) - 4Q19: Beats on luck and write-back; outlook un...

Despite 4Q19 adjusted EBITDA of HK$1,185m (+40% yoy, +25% qoq) beating expectations, it is a non-event, especially in the current COVID-19 environment. Outlook-wise, management is adopting a “wait-and-see” attitude on Lisboa Palace’s opening and offers little confidence or certainty. We expect SJM to be loss-making currently as it is operating at 25% of normal revenue levels while costs are shaved by only 5-10%. Maintain HOLD and target price of HK$8.00. Entry price: HK$7.00.

Ivy Xu Da ... (+2)
  • Ivy Xu Da
  • Robin Yuen
M04 MGM China Holdi... (Travel & Leisure)
8WY WYNN MACAU LTD ... (+5)

Macau Gaming: 3Q19 wrap-up: VIP to remain difficult for rest of year. ...

Core-mass grew while premium-mass and VIP suffered in 3Q19, continuing the trends from last quarter. For 4Q19, VIP GGR is likely to remain negative; thus we lower 2019 GGR forecast to -3.3% yoy (previously -1.1%). Maintain MARKET WEIGHT as the risks of lower earnings and multiple de-rating seem limited. But risk-reward is unattractive as valuations have somewhat recovered to 11x EV/EBITDA now, from 10x in Aug 19 (and 2016 trough of 9x), but near-term visibility remains cloudy.

Jack Goh Tooan Orng ... (+3)
  • Jack Goh Tooan Orng
  • Robin Yuen
  • Vincent Khoo Boo Aik
M04 MGM China Holdi... (Travel & Leisure)
G13 Genting Singapo... ... (+7)

Regional Gaming – A compelling wager for 2021; Bigger rewards in 2022

We expect gaming stocks to chart an upward trend as valuations re-rate to factor in the eventual business normalisation trends with the gradual global dispensation of COVID-19 vaccines throughout 2021. ASEAN gaming stocks are clearer beneficiaries. However, Macau gaming stocks’ recoveries would be dampened by China’s clampdown on money-laundering and uncertainties tied to the concession renewal terms. Maintain MARKET WEIGHT with top picks being GENS and GENM.

Robin Yuen
  • Robin Yuen

SJM Holdings (880 HK): 2Q20: A local hero in a land with no visitors

SJM’s tier 2 casinos helped propel SJM’s market share to 30% in 2Q20, as the local gamblers patronised slots and grind-mass games. Unfortunately, management expects no material benefit from the 15 July border relaxations for 3Q20. Grand Lisboa Palace remains on schedule to open at end-20, but a full ramp-up is shaping up to be an elusive outcome. Maintain HOLD and target price of HK$7.00. Entry price: HK$6.50.

Joyce Chan Pui Lai ... (+5)
  • Joyce Chan Pui Lai
  • Robin Yuen
  • Julia Pan Mengyao
  • Zhifeng Shen
  • Ken Lee
N1U New Oriental Ed... (Food & Beverage)
600519 Kweichow Moutai... (Retail) ... (+4)

Greater China Daily: Wednesday, July 29, 2020

KEY HIGHLIGHTS Initiate Coverage Fuyao Glass (3606 HK/BUY/HK$22.15/Target: HK$27.00) Consolidator of the global auto glass industry. Initiate coverage with BUY. Target price: HK$27.00. Results Kweichow Moutai (600519 CH/BUY/Rmb1,670/Target: Rmb1,938) 1H20: Improving cash flow status. Upgrade to BUY. New Oriental Education & Technology Group (EDU US/BUY/US$139.75/Target: US$162.00) 4QFY20: Near-term headwinds; expect a full recovery in 2HFY21. SJM (880 HK/HOLD/HK$8.16/Target: HK$7.00) 2Q20 A local hero in a land with no visitors. TRADERS’ CORNER CG Services (6098 HK): Trading Buy Range...

Ivy Xu Da ... (+2)
  • Ivy Xu Da
  • Robin Yuen

SJM Holdings (880 HK) - 4Q19: Beats on luck and write-back; outlook un...

Despite 4Q19 adjusted EBITDA of HK$1,185m (+40% yoy, +25% qoq) beating expectations, it is a non-event, especially in the current COVID-19 environment. Outlook-wise, management is adopting a “wait-and-see” attitude on Lisboa Palace’s opening and offers little confidence or certainty. We expect SJM to be loss-making currently as it is operating at 25% of normal revenue levels while costs are shaved by only 5-10%. Maintain HOLD and target price of HK$8.00. Entry price: HK$7.00.

Ivy Xu Da ... (+2)
  • Ivy Xu Da
  • Robin Yuen
M04 MGM China Holdi... (Travel & Leisure)
8WY WYNN MACAU LTD ... (+5)

Macau Gaming: 3Q19 wrap-up: VIP to remain difficult for rest of year. ...

Core-mass grew while premium-mass and VIP suffered in 3Q19, continuing the trends from last quarter. For 4Q19, VIP GGR is likely to remain negative; thus we lower 2019 GGR forecast to -3.3% yoy (previously -1.1%). Maintain MARKET WEIGHT as the risks of lower earnings and multiple de-rating seem limited. But risk-reward is unattractive as valuations have somewhat recovered to 11x EV/EBITDA now, from 10x in Aug 19 (and 2016 trough of 9x), but near-term visibility remains cloudy.

Jack Goh Tooan Orng ... (+3)
  • Jack Goh Tooan Orng
  • Robin Yuen
  • Vincent Khoo Boo Aik
M04 MGM China Holdi... (Travel & Leisure)
G13 Genting Singapo... ... (+7)

Regional Gaming – A compelling wager for 2021; Bigger rewards in 2022

We expect gaming stocks to chart an upward trend as valuations re-rate to factor in the eventual business normalisation trends with the gradual global dispensation of COVID-19 vaccines throughout 2021. ASEAN gaming stocks are clearer beneficiaries. However, Macau gaming stocks’ recoveries would be dampened by China’s clampdown on money-laundering and uncertainties tied to the concession renewal terms. Maintain MARKET WEIGHT with top picks being GENS and GENM.

Robin Yuen
  • Robin Yuen

SJM Holdings (880 HK): 2Q20: A local hero in a land with no visitors

SJM’s tier 2 casinos helped propel SJM’s market share to 30% in 2Q20, as the local gamblers patronised slots and grind-mass games. Unfortunately, management expects no material benefit from the 15 July border relaxations for 3Q20. Grand Lisboa Palace remains on schedule to open at end-20, but a full ramp-up is shaping up to be an elusive outcome. Maintain HOLD and target price of HK$7.00. Entry price: HK$6.50.

Joyce Chan Pui Lai ... (+5)
  • Joyce Chan Pui Lai
  • Robin Yuen
  • Julia Pan Mengyao
  • Zhifeng Shen
  • Ken Lee
N1U New Oriental Ed... (Food & Beverage)
600519 Kweichow Moutai... (Retail) ... (+4)

Greater China Daily: Wednesday, July 29, 2020

KEY HIGHLIGHTS Initiate Coverage Fuyao Glass (3606 HK/BUY/HK$22.15/Target: HK$27.00) Consolidator of the global auto glass industry. Initiate coverage with BUY. Target price: HK$27.00. Results Kweichow Moutai (600519 CH/BUY/Rmb1,670/Target: Rmb1,938) 1H20: Improving cash flow status. Upgrade to BUY. New Oriental Education & Technology Group (EDU US/BUY/US$139.75/Target: US$162.00) 4QFY20: Near-term headwinds; expect a full recovery in 2HFY21. SJM (880 HK/HOLD/HK$8.16/Target: HK$7.00) 2Q20 A local hero in a land with no visitors. TRADERS’ CORNER CG Services (6098 HK): Trading Buy Range...

Ivy Xu Da ... (+2)
  • Ivy Xu Da
  • Robin Yuen

SJM Holdings (880 HK) - 4Q19: Beats on luck and write-back; outlook un...

Despite 4Q19 adjusted EBITDA of HK$1,185m (+40% yoy, +25% qoq) beating expectations, it is a non-event, especially in the current COVID-19 environment. Outlook-wise, management is adopting a “wait-and-see” attitude on Lisboa Palace’s opening and offers little confidence or certainty. We expect SJM to be loss-making currently as it is operating at 25% of normal revenue levels while costs are shaved by only 5-10%. Maintain HOLD and target price of HK$8.00. Entry price: HK$7.00.

Ivy Xu Da ... (+2)
  • Ivy Xu Da
  • Robin Yuen
M04 MGM China Holdi... (Travel & Leisure)
8WY WYNN MACAU LTD ... (+5)

Macau Gaming: 3Q19 wrap-up: VIP to remain difficult for rest of year. ...

Core-mass grew while premium-mass and VIP suffered in 3Q19, continuing the trends from last quarter. For 4Q19, VIP GGR is likely to remain negative; thus we lower 2019 GGR forecast to -3.3% yoy (previously -1.1%). Maintain MARKET WEIGHT as the risks of lower earnings and multiple de-rating seem limited. But risk-reward is unattractive as valuations have somewhat recovered to 11x EV/EBITDA now, from 10x in Aug 19 (and 2016 trough of 9x), but near-term visibility remains cloudy.

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