Maybank Kim Eng predicts Resorts World Manila will see modest growth this year, bucking the trend in Macau as it attracts its key mass markets.
Despite the current slowdown in the gaming industry as a result of the crackdown on corruption by the Chinese government, RWM is able to remain profitable because it is more of a casino destination for the premium mass and mass markets, Maybank analyst Rommel Rodrigo wrote in a note.
About 51 percent of gross gaming revenue comes from mass market tables and slot machines, the company’s main drivers.
“The VIP market is a more opportunistic play but still provides key support. Modest growth expected this year while RWM’s main mass market is disrupted by construction of the NAIA expressway.”
RWM opened in 2009 as the first integrated resort in the Philippines and, five years on, the “company is still in ramp-up mode.”
RWM reported 2 percent YoY growth in 15Q1 for net profit of PHP1.7 billion ($37.6 million) with the highest blended win rate in the company’s history of 6.1 percent, as well as benefits from cost containment and greater operating efficiency.
However, despite the positive outlook for RWM, “the current regional gaming slowdown is likely to filter through by way of a decline in gaming turnover, which we estimate at 3 percent this year, following 2014’s 5 percent slide.”
But Maybank believes it may recover in the next two years with completion of Phases 2 and 3 expansions coupled with the finish of NAIA expressway and Project Runway, the pedestrian link to NAIA Terminal 3.
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