Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

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The 7.4% year-over-year gross gaming revenue increase in September is stronger than consensus estimates. The improvement is driven by a low base for VIP revenue (Dore theft incident in September 2015) and three new casinos stimulating demand. The increase appears to be broad-based across the VIP and mass segments, based on our conversations with industry participants. Without an official breakdown between VIP and mass revenue, we estimate that both mass and VIP revenue increased by at least mid-single-digit rates on a year-over-year basis. We have turned slightly more positive on the outlook for the junket VIP business, following our checks indicating continuous improvement in liquidity. However, we maintain our VIP revenue forecast of negative 16% this year, as it remains to be seen whether the VIP revenue improvement is sustainable.We maintain our fair value estimates for our Macau gaming coverage, with an unchanged three-year horizon. Our Macau gaming coverage is now fairly valued, with the exception of <a href="https://www.smartkarma.com/entities/472" target="_blank" data-smartkarma-citation="entities:472:1">MGM China Holdings Ltd (2282 HK)</a> and <a href="https://www.smartkarma.com/entities/606" target="_blank" data-smartkarma-citation="entities:606:1">Wynn Resorts Ltd (WYNN US)</a>. Our best ideas MGM China and Wynn Resorts have price/fair value estimate ratios of 0.84 times and 0.80 times, respectively, and fair value estimates of HKD 16.00 per share and $122 per share. <a href="https://www.smartkarma.com/entities/806" target="_blank" data-smartkarma-citation="entities:806:1">Galaxy Entertainment Group Limited (27 HK)</a> has the next lowest price/fair value estimate of 0.88 times and a fair value estimate of HKD 33.00 per share.Analyst: Chelsey Tam

The 7.4% year-over-year gross gaming revenue increase in September is stronger than consensus estimates. The improvement is driven by a low base for VIP revenue (Dore theft incident in September 2015) and three new casinos stimulating demand. The increase appears to be broad-based across the VIP and mass segments, based on our conversations with industry participants. Without an official breakdown between VIP and mass revenue, we estimate that both mass and VIP revenue increased by at least mid-single-digit rates on a year-over-year basis. We have turned slightly more positive on the outlook for the junket VIP business, following our checks indicating continuous improvement in liquidity. However, we maintain our VIP revenue forecast of negative 16% this year, as it remains to be seen whether the VIP revenue improvement is sustainable.We maintain our fair value estimates for our Macau gaming coverage, with an unchanged three-year horizon. Our Macau gaming coverage is now fairly valued, with the exception of MGM China Holdings Ltd (2282 HK) and Wynn Resorts Ltd (WYNN US). Our best ideas MGM China and Wynn Resorts have price/fair value estimate ratios of 0.84 times and 0.80 times, respectively, and fair value estimates of HKD 16.00 per share and $122 per share. Galaxy Entertainment Group Limited (27 HK) has the next lowest price/fair value estimate of 0.88 times and a fair value estimate of HKD 33.00 per share.Analyst: Chelsey Tam

Gaming Revenue Returned to Growth in September and August; More Optimism in the Junket VIP Business

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

<a href="https://www.smartkarma.com/entities/13644" target="_blank" data-smartkarma-citation="entities:13644:1">Coach Inc (COH US)</a> fell another -2.3% today in the US after an analyst downgrade, and the stock is down -14.4% since reporting unexciting Q4 FY16 earnings results on the morning of August 9th. We remain bearish on the stock; in our view, the Street's sales and earnings estimates for FY17 and FY18 remain far too optimistic given weaker spending by Asian tourists in the US and overly aggressive Street assumptions for Japanese and Chinese consumer spending. We also believe that COH will struggle to…

Coach Inc (COH US) fell another -2.3% today in the US after an analyst downgrade, and the stock is down -14.4% since reporting unexciting Q4 FY16 earnings results on the morning of August 9th. We remain bearish on the stock; in our view, the Street's sales and earnings estimates for FY17 and FY18 remain far too optimistic given weaker spending by Asian tourists in the US and overly aggressive Street assumptions for Japanese and Chinese consumer spending. We also believe that COH will struggle to…

July Tourism & Macro Data Suggest Coach Q1 FY17 Will Disappoint

Hong Kong

Shangri-La Asia Limited, through its subsidiaries, owns and operates hotels, and provides management and related services.  The Company also leases offices, commercial, residential and exhibition hall space.

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Shangri-La Asia (69 HK)

Gaming Revenue Returned to Growth in September and August; More Optimism in the Junket VIP Business

The 7.4% year-over-year gross gaming revenue increase in September is stronger than consensus estimates. The improvement is driven by a low base...

Morningstar, Inc.

July Tourism & Macro Data Suggest Coach Q1 FY17 Will Disappoint

Coach Inc (COH US) fell another -2.3% today in the US after an analyst downgrade, and the stock is down -14.4% since reporting unexciting Q4 FY16...

Daniel Hellberg

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