Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Melco International Development / Event-Driven

<ul>
<li>
<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> has entered into a share repurchase agreement with a wholly-owned entity of <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> to repurchase (and cancel) 40.37mn shares for US$169.8mn.</li>
<li>Melco's effective holding will decline to 51.7% from 53.1% currently. This is the second parent/sub repurchase agreement in the last 7 months. </li>
<li>MLCO's previously announced US$500mn share repurchase program remains unaffected by this privately negotiated transaction, with US$412mn still available for future repurchases under the program.</li>
</ul>



Melco Resorts &amp; Entertainment (MLCO US) has entered into a share repurchase agreement with a wholly-owned entity of Melco International Development (200 HK) to repurchase (and cancel) 40.37mn shares for US$169.8mn.
Melco's effective holding will decline to 51.7% from 53.1% currently. This is the second parent/sub repurchase agreement in the last 7 months. 
MLCO's previously announced US$500mn share repurchase program remains unaffected by this privately negotiated transaction, with US$412mn still available for future repurchases under the program.


Melco (200 HK) Takes More Money Off The Table

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

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Credit

Melco Resorts' (MLCO) FY 2022 results were better than peers', supported by strong earnings growth at its overseas assets (in the Philippines and Cyprus) amid a weak showing in Macau. In addition, management reported rosy earnings guidance for YTD 2023 (in line with those reported by peers). Going forward, we forecast that the company’s revenue will reach 70-80% of the FY 2019 level, supported by a recovery in industry GGR to 50-60% of the 2019 level, as well as contributions from Studio City Phase 2 and City of Dreams Mediterranean from H2/23. This should allow MLCO to generate positive FCF and deleverage in FY 2023. We move our recommendation to “Buy” on the MPEL curve from “Hold”.

  Melco Resorts' (MLCO) FY 2022 results were better than peers', supported by strong earnings growth at its overseas assets (in the Philippines and Cyprus) amid a weak showing in Macau. In addition, management reported rosy earnings guidance for YTD 2023 (in line with those reported by peers).   Going forward, we forecast that the company’s revenue will reach 70-80% of the FY 2019 level, supported by a recovery in industry GGR to 50-60% of the 2019 level, as well as contributions from Studio City Phase 2 and City of Dreams Mediterranean from H2/23. This should allow MLCO to generate positive FCF and deleverage in FY 2023.   We move our recommendation to “Buy” on the MPEL curve from “Hold”. 

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Hong Kong

Melco Resorts & Entertainment Limited develops, owns, and operates casinos. The Company offers casino gaming, restaurants, bars, and resorts facilities. Melco Resorts & Entertainment serves customers in Asia.

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Melco Resorts & Entertainment (MLCO US)

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