Macau (MNA) – A challenging operating environment will be experienced by SJM Holdings Ltd. given the lack of presence on Cotai, the Macau SAR’s Integrated Resort district, noted brokerage Union Gaming.
‘We expect the company to be a share donator for the foreseeable future and largely unable to participate in the ongoing market recovery,’ stated the analysts.
In addition, Union Gaming noted the partially opened Jai Alai casino – a revamped SJM property opened in the 1980s – ‘continues to be a drag on earnings to the tune of about US$50million’ given that it is ‘staffed up but still waiting approvals to open the hotel and F&B portions of the property.’
With profits for the third quarter down 16.5 per cent as announced on Monday, the analysts estimate the new 2017 EBITA would amount to some HK$2.99 billion (US$384.24 million), while their estimate for 2018 is now at HK$3.21 billion.
SJM also announced it is postponing the completion of Grand Lisboa Palace project in Cotai to the end of 2018, after Typhoon Hato hit the city in August and a fire affected the property in September, delaying construction.
Union Gaming is thus expecting the SJM’s new property to be unveiled in the first quarter of 2019, while estimating the EBITDA for for the new property that same year would be HK$1.46 billion.
A similar prediction about the opening timeline of the new property is also made by brokerage firm Stanford C. Bernstein.
Union Gaming analysts expect that SJM will need to ‘build out a mass market database to compete with the Cotai peers that will have had a significant start’.
