Melco Crown Entertainment, the Macau casino venture of entrepreneur Lawrence Ho and billionaire James Packer, rose for a fourth day in Hong Kong on prospects its version of the Las Vegas Strip in Cotai will boost profit.
Shares of Hong Kong-based Melco Crown climbed 0.6 per cent, extending this year’s rally to 115 per cent. The US-traded shares climbed 7.3 per cent to US$35.59 in November and have returned 111 per cent this year. The Bloomberg China-US Equity Index of the most-traded Chinese stocks in New York jumped 5.6 per cent last month, as the iShares China Large-Cap ETF, the nation’s largest exchange-traded fund in the US, climbed 6.8 per cent.
Melco is building a casino resort in Cotai that will mirror the Las Vegas Strip. The company said it’s looking for “mass gamblers” after third-quarter earnings missed estimates as high-stakes bettors spent less. Profit forecasts for the next four quarters rose 45 per cent from a year ago, compared with 23 per cent for Las Vegas Sands, the world’s biggest casino operator, according to Bloomberg Industries data.
“There’s been a shift in play from the peninsula, where the older casinos are, to Cotai, where Melco Crown is a major player,” Bryan Maher, an analyst at Craig-Hallum Capital Group in New York, said on November 25. “Macau is the centre of the gaming universe and Melco has 100 per cent” of profit coming from there, he said.
Melco isn't alone in investing in Cotai for its growth. It will debut its second casino on the strip in 2015 alongside Las Vegas Sands and Hong Kong-based Galaxy Entertainment Group, while MGM Resorts International and Wynn Resorts plan to open new locations there in 2016.
