Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Macau gaming companies gained this week as Hong Kong is expected to ease Covid restrictions, with Macau expected to follow suit.</li>
<li>Last week, the six incumbent Macau gaming operators submitted tenders for the gaming concessions, together with last-minute interloper, the Genting Group.</li>
<li>
<a href="https://www.smartkarma.com/entities/sands-china-ltd" target="_blank" data-smartkarma-citation="entities:182:1" rel="noopener">Sands China (1928 HK)</a> has borrowed heavily and also leads other Macau gaming plays in dividends paid out to shareholders. This may not be lost on Macau officials. </li>
</ul>


Macau gaming companies gained this week as Hong Kong is expected to ease Covid restrictions, with Macau expected to follow suit.
Last week, the six incumbent Macau gaming operators submitted tenders for the gaming concessions, together with last-minute interloper, the Genting Group.

Sands China (1928 HK) has borrowed heavily and also leads other Macau gaming plays in dividends paid out to shareholders. This may not be lost on Macau officials. 


Sands China (1928 HK): Positives And Negatives

<ul>
<li>In a surprise move, <a href="https://www.smartkarma.com/entities/genting-bhd" target="_blank" data-smartkarma-citation="entities:14210:1" rel="noopener">Genting Bhd (GENT MK)</a> - or <a href="https://www.smartkarma.com/entities/genting-malaysia-bhd" target="_blank" data-smartkarma-citation="entities:3141:1" rel="noopener">Genting Malaysia (GENM MK)</a> - has joined the six incumbents in bidding for new casino licences in Macau.</li>
<li>The bidding process follows Macau's record low monthly gaming revenue in July after casinos were closed for 12 days in response to a Covid outbreak.</li>
<li>Casinos have re-opened, yet there is little to cheer about as business remains muted. The six winners are expected to be announced by the end of November or early December.</li>
</ul>


In a surprise move, Genting Bhd (GENT MK) - or Genting Malaysia (GENM MK) - has joined the six incumbents in bidding for new casino licences in Macau.
The bidding process follows Macau's record low monthly gaming revenue in July after casinos were closed for 12 days in response to a Covid outbreak.
Casinos have re-opened, yet there is little to cheer about as business remains muted. The six winners are expected to be announced by the end of November or early December.


Melco International Development / Event-Driven

<ul>
<li>Both <a href="https://www.smartkarma.com/entities/melco-international-development-ltd" target="_blank" data-smartkarma-citation="entities:809:1" rel="noopener">Melco International Development (200 HK)</a> and <a href="https://www.smartkarma.com/entities/melco-crown-entertainme-adr" target="_blank" data-smartkarma-citation="entities:810:1" rel="noopener">Melco Resorts &amp; Entertainment (MLCO US)</a> have underperformed peers. But Melco is unjustifiably "outperforming" MLCO.</li>
<li>Preceding my comments on Melco, are the current setup/unwind tables for Asia-Pacific Holdcos. </li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>


Both Melco International Development (200 HK) and Melco Resorts &amp; Entertainment (MLCO US) have underperformed peers. But Melco is unjustifiably "outperforming" MLCO.
Preceding my comments on Melco, are the current setup/unwind tables for Asia-Pacific Holdcos. 
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld: Melco Trading Rich As Lawrence Adds To His Position

<ul>
<li>On the 2 February, <a href="https://www.smartkarma.com/entities/playtech-plc" target="_blank" data-smartkarma-citation="entities:22099:1" rel="noopener">Playtech Plc (PTEC LN)</a>'s shareholders voted down <a href="https://www.smartkarma.com/entities/aristocrat-leisure-ltd" target="_blank" data-smartkarma-citation="entities:10303:1" rel="noopener">Aristocrat Leisure (ALL AU)</a>'s £2.1 billion Offer.</li>
<li>The Offer failed after Playtech was unable to engage with a block of Asia-based investors who owned ~28% of the company.</li>
<li>As a developer of online casino games, Playtech is an obvious target. Reportedly its second-largest investor and two Playtech CEOs - former and current - are piecing together a deal. </li>
</ul>


On the 2 February, Playtech Plc (PTEC LN)'s shareholders voted down Aristocrat Leisure (ALL AU)'s £2.1 billion Offer.
The Offer failed after Playtech was unable to engage with a block of Asia-based investors who owned ~28% of the company.
As a developer of online casino games, Playtech is an obvious target. Reportedly its second-largest investor and two Playtech CEOs - former and current - are piecing together a deal. 


IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/blackstone-group-inc" target="_blank" data-smartkarma-citation="entities:27166:1" rel="noopener">Blackstone Group (BX US)</a> has returned for a third time with a A$12.50 cash per share offer, a marginal 1.2% bump to its last offer of A$12.35 on 10 May.</li>
<li>
<a href="https://www.smartkarma.com/entities/crown-resorts-ltd" target="_blank" data-smartkarma-citation="entities:808:1" rel="noopener">Crown Resorts (CWN AU)</a> is at the start of a difficult reform agenda it needs to fulfil to maintain its gaming licenses. Nevertheless, Blackstone’s ongoing interest suggest inherent value.</li>
<li>Blackstone’s bid retains leeway for a bump and may draw out previous suitors. At the last close of A$11.54, the shares trade at an 8.3% gross spread to the offer.</li>
</ul>



Blackstone Group (BX US) has returned for a third time with a A$12.50 cash per share offer, a marginal 1.2% bump to its last offer of A$12.35 on 10 May.

Crown Resorts (CWN AU) is at the start of a difficult reform agenda it needs to fulfil to maintain its gaming licenses. Nevertheless, Blackstone’s ongoing interest suggest inherent value.
Blackstone’s bid retains leeway for a bump and may draw out previous suitors. At the last close of A$11.54, the shares trade at an 8.3% gross spread to the offer.


Blackstone Third-Time Lucky with Crown Resorts Bid?

Hong Kong

Melco International Development Limited, through its subsidiaries, operates investment banking, financial services, technology, fine-dining, leisure and tourism, property investment, and investment businesses. The Company carries on financial service businesses under the VC CFN and VC CEF brand names.  Melco also customizes and sells trading and back office systems under the iAsia name.

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Melco International Development (200 HK)

Sands China (1928 HK): Positives And Negatives

Sands China appears fairly valued here. If I had to bet on one incumbent whose license could be lost, Sand China stands out. For that, I would...

David Blennerhassett

Genting Fancies A Flutter In Macau

Macau's China-like, zero-Covid policy affords limited visibility. In contrast, Singapore reported its highest gaming revenue quarter - April-June -...

David Blennerhassett

StubWorld: Melco Trading Rich As Lawrence Adds To His Position

I'd be inclined to reverse the stub here - Short Melco International and Long Melco Resorts. The current level appears unsustainable.

David Blennerhassett

Playtech (PTEC LN): A Nuanced Flutter

Presumably, a firm Offer from TTB could only unfold if they have the inside track on the Asian block's intentions. This is a messy, nuanced affair,...

David Blennerhassett

Blackstone Third-Time Lucky with Crown Resorts Bid?

Blackstone’s new A$12.50 cash per share bid retains leeway for a bump and may draw out previous suitors. At the last close of A$11.54 per share,...

Arun George

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