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Slow ramp-up expected for Grand Lisboa Palace

SJM’s Grand Lisboa Palace will suffer from s slow ramp up, and likely fall behind schedule for its opening, according to Bernstein analysts in a note on Tuesday.

While the Cotai property is scheduled to open in late 2019, Bernstein analysts said they have already modeled for the property to open in the first quarter of 2020, but added that they “would not be surprised if the opening does not occur until summer (mid) 2020.”

However, SJM will have challenges to contend with outside of the new property opening. Bernstein said the opening of SJM GLP will not be enough to reverse the company’s market share decline.

“Over the past five years, SJM's market share has fallen from over 23 percent to a historic low of 14 percent. SJM has very limited presence in the critically important Premium Mass segment and GLP will not be the panacea to cure that ill,” it said.

Bernstein analysts have placed SJM’s EBITDA forecast at 9 percent below consensus for 2020E.

“The lack of any strategy to capture the high margin Premium Mass market and the continued delay in opening Cotai are fundamental problems with management direction and focus. While there has been some operational improvement, we see not enough to change our view.”

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