Melco sees no “V-shaped” Macau recovery, Sterne Agee says

Melco Crown Entertainment is confident new supply will help drive renewed growth in Macau, however management does not expect a near-term “V-shaped” recovery, Sterne Agee said in a note.

The firm last week hosted investor meetings with MPEL Co-Chairman and CEO Lawrence Ho and CFO Geoffrey Davis.

The company said the 8 percent year-to-date visitation figures to Macau, despite no new supply, points to underlying demand. It also believes the anti-corruption campaign which has driven China’s high-rollers under the radar will begin to slowly give way to a new focus on business.

However, at present “management believes China’s anti-corruption campaign is having a deep negative psychological impact on Macau high-end patrons,” it said.

Melco’s Studio City resort is on time and on budget for an opening in Q3 next year and the company sees at least 400 tables being allocated, although did acknowledge some uncertainty over allocations.

 

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