20141127-高盛-Volatility_persists_near_term__alpha_generation_opportunity_emerges_68页_1mb
报告摘要
Macau Gaming Sector Summary
Core Content and Key Insights
The Macau gaming sector has historically been a profitable investment since 2009, with most stocks outperforming the MSCI HK Index by an average of 39%. However, the sector experienced a notable underperformance in 2011 and during the first half of 2014. This performance divergence among stocks has created opportunities for alpha generation through strategic stock selection, with an average annual alpha of 102% over the past five years. In 2014, the alpha was only 16% due to the stocks moving closely together.
The report suggests that while some factors contributing to the slowdown in Gross Gaming Revenue (GGR) are temporary (e.g., tight junket liquidity, hotel capacity constraints), others may have longer-term implications (e.g., anti-graft measures, transit visa restrictions). Despite these challenges, the long-term growth in Chinese gaming spending is viewed positively, especially due to the proximity of Macau and the lack of large-scale casinos in Asia.
The analysis forecasts a shallower and more backend-loaded recovery for 2015, with GGR growth revised from +9% to +3%. This implies that the recovery may not be as strong as previously anticipated. The report also notes that the sector's valuation has returned to historical averages, with EV/EBITDA and P/E multiples now aligning with mid-cycle levels.
Stock Recommendations
| Stock | Ticker | Rating Change | 12-Month Target Price (LCY) | Target Price Change |
|---|---|---|---|---|
| MGM China | 2282.HK | Buy (unchanged) | 32.70 | +40% |
| Melco Crown - HK | 6883.HK | Buy (unchanged) | 89.90 | +33% |
| MPEL | MPEL | Buy (unchanged) | 34.50 | +31% |
| Galaxy | 0027.HK | Buy (unchanged) | 65.30 | +23% |
| Wynn Macau | 1128.HK | Neutral (from Buy) | 31.50 | +19% |
| Sands China | 1928.HK | Neutral (from Buy) | 51.40 | +10% |
| SJM | 0880.HK | Neutral (unchanged) | 16.00 | +2% |
The report highlights that Sands China has been downgraded due to its inability to leverage its hotel room inventory to gain market share, and its valuation premium over peers is expected to narrow. MGM China and Galaxy are recommended as top picks due to their differentiated products and strong management capabilities. Wynn Macau, while having a solid track record, is expected to face near-term earnings risks due to the smoking ban.
Key Sector Themes
- Secular Growth in Chinese Gaming Spending: The long-term growth of gaming spending by mainland Chinese visitors is a key driver for Macau's continued success.
- Proximity Advantage: Macau's unique position as the only city in China with legalized casinos gives it a competitive edge.
- Alpha Generation Potential: Investors can generate alpha by selecting top-performing stocks and avoiding underperformers.
- Cyclical vs. Structural Slowdown: The current GGR slowdown is primarily cyclical, with potential for recovery as the year progresses.
- New Casino Impact: The opening of new casinos in mid-2015 is expected to drive incremental demand and influence market share dynamics.
GGR and EBITDA Projections
| Year | GGR (US$mn) | GGR Growth | EBITDA (US$mn) | EBITDA CAGR |
|---|---|---|---|---|
| 2013 | 44,990 | - | 9,194 | - |
| 2014E | 44,380 | -11% | 9,369 | -2% |
| 2015E | 45,773 | +20% | 9,611 | -10% |
| 2016E | 51,733 | +16% | 10,837 | -14% |
| 2017E | 57,953 | +13% | 12,532 | -14% |
| 2018E | 64,098 | +12% | 13,348 | -18% |
The report projects a slower EBITDA growth rate (11% CAGR) for 2014-2018 compared to the previous forecast of 15% CAGR, due to the revised GGR assumptions. As a result, the EV/EBITDA multiples have been cut by 1-2x to 12-13x, and the 12-month target prices have been reduced by 4%-23%.
Valuation Metrics
| Metric | 2014E | 2015E | 2016E | 2017E | 2018E | CAGR |
|---|---|---|---|---|---|---|
| EV/EBITDA | 14.4x | 14.4x | 13.4x | 11.8x | 10.5x | - |
| P/E | 17.7x | 17.9x | 17.1x | 16.2x | 14.0x | - |
| FCF Yield | 6.4% | - | - | - | - | - |
The sector is currently trading at mid-cycle valuation levels, with EV/EBITDA and P/E multiples recovering to historical averages. The FCF yield has also rebounded slightly to 6.4%.
Drivers of GGR Slowdown
| Driver | Impact on VIP | Impact on Premium Mass | Impact on Grind Mass | Impact Duration |
|---|---|---|---|---|
| Tight junket liquidity | *** | *** | * | Short-term |
| Anti-graft measures | *** | ** | - | Short-term |
| Longer junket debt collection | *** | - | - | Short-term |
| More cautious spending | ** | ** | - | Long-term |
| Transit visa restrictions | - | *** | * | Long-term |
| Difficulty for agents to visit | *** | - | - | Short-term |
| Slower visitation growth from wealthier provinces | - | ** | * | Short-term |
| Cancelled packaged tours to HK | - | - | * | Short-term |
| Hotel capacity constraint | - | * | *** | Short-term |
| Smoking ban | - | ** | ** | Short-term |
The report indicates that while some drivers are temporary, others like anti-graft and transit visa could have long-term effects. The GGR slowdown is primarily attributed to these factors, with VIP and premium mass segments being most affected.
Conclusion
Despite the current volatility and challenges, the Macau gaming sector remains attractive for long-term investment due to the secular growth in Chinese gaming spending and the lack of large-scale casinos in Asia. The report suggests that the sector may have bottomed in early-October, and that the recovery is expected to be shallower and more backend-loaded. With the opening of new casinos in mid-2015, there may be opportunities for alpha generation as market share trends shift. Investors should remain cautious and monitor the impact of policy changes and market dynamics closely.
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