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Summit Ascent VIP has potential to nearly double by 2020: Union Gaming

Summit Ascent Holdings, which operates the Tigre de Cristal property in the Primorye gaming zone in Russia, has the potential to almost double its VIP business by 2020 after its second-half 2018 results topped expectations, Union Gaming said.

The brokerage upgraded its rating for the operator to a “buy” after the release of results, which were helped by improving VIP revenue and continued strong growth in mass and slots.

“We see significant upside potential with respect to the company's VIP program on a go-forward basis,” it said, adding that it is also likely to benefit from the cluster effect of an expected opening of a project by NagaCorp later this year.  

Group profit for 2018 was HK$4.1 million, compared to a loss of HK$10.0 million for the prior year. Total revenue for the year was HK$463.2 million, down 1.6 percent year-over-year, partly due to the weakening Russian rouble.

For H2, revenue declined 4 percent to $255.4 million, above Union Gaming’s forecast for $246.6 million. VIP volume in 2H18 was $9.1 billion, down 13 percent but well above the firm’s forecast for $7 billion.

“Upside to our expectations came from some number of returning junket agents and players who had been trialing other new(er) regional casinos, particularly in Korea. Given the superior economics Summit Ascent is able to offer junkets (Vladivostok has the lowest gaming tax regime in all of Asia), as well as political sensitivities of China/Korea, this dynamic is not surprising.”

“With Suncity now in the mix, and under the assumption that both physical and HR infrastructure will be put in place over the course of 2019, we look for 2020 to experience significant growth in VIP volumes.”

Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.

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