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Suncity Group Holdings Inc's Hoana Casino project in Vietnam is unlikely to contribute "significantly" to the interests of Hong Kong-listed companies "through fiscal 2022," according to a research paper by former banking analyst Michael Ting.
"This is due to the current macro [economic] uncertainty related to COVID-19 and only a gradual resumption of international travel is expected," Mr Ting's paper added.
Created on behalf of Singapore-based Smartkarma Innovations Pte Ltd, it is described as "Independent Investment Research Network".
Until April this year, Mr. Ting was a director of Malaysia-based banking group CIMB.
The preview period for Hoiana, including casino operations, began on June 28.
In early August, Andrew Law, executive director of Suncity Group Holdings, said it could take "five to six years" to recoup his investment in plans for a Hoiana casino resort on Vietnam's central coast.
Law added at the time that the group expected the COVID-19 pandemic to have "at least" a negative impact on Vietnam for the rest of the year.
In his paper, Mr Ting reiterated that SunCity Group Holdings owns a substantial 34% of the project, with each of its remaining partners owning roughly a third.
Other parties involved in the project include Vietnam's wealth manager, Vina Capital Group, and subsidiaries of Hong Kong's Chow Tai Fook Enterprises Ltd.
He added: "Hoyana Phase 1 has over 1,000 hotel rooms, 140 game tables (VIP 2/3, public market 1/3) and a $1 billion capital expenditure budget in 330 slots."
Mr Ting said there were better margins in terms of interest, tax, depreciation and amortisation (EBITDA) for Hoiana's game compared to Macau, where Alvin Chauchukwa-led privately owned junket brand SunCity Group has a core business. Smart Karma newspaper said differences in tax spending could help Hoiana's outlook.
The Suncity brand "already runs a VIP room at Crown Plaza in Da Nang," Mr. Ting wrote.
"We estimate that Suncity generated approximately 1.4 million GGR (games total revenue) per table per month at Crowne Plaza.
"Externalizing this to 140 tables in the Hoiana Phase 1, we estimate that the property will be able to produce about $196 million per month, or $2.35 billion per year in GGR," he added.
"Applying an EBITDA margin of 20%, which is twice that of Macau, we estimate that Hoiana will be able to achieve $470 million in annual EBITDA once Phase 1 is completed, which is 70% of Nagakov's 2019 EBITDA," Ting added.
He later referred to a Hong Kong-listed company, an exclusive casino operator in Cambodia's capital Phnom Penh.
BY: 우리카지노탑