* SJM's Q3 net profit at HK$1.7 billion
* Adj EBITDA matches f'casts of HK$1.9 bln
* Drop in VIP high-rollers cuts into growth
* New Cotai casino unlikely to open before 2016
HONG KONG, Nov 15 Macau's biggest casino
operator, SJM Holdings Ltd, controlled by the family
of gambling tycoon Stanley Ho, posted a 41 percent rise in
third-quarter net profit, buoyed by a larger number of mass
market Chinese gamblers.
The former Portuguese colony of Macau is the only place in
China where casino gambling is legal. A drop in spending from
VIP high-rollers has put pressure on SJM and its competitors,
which are already seeing a sharp slowdown in growth in the
world's casino capital.
SJM said on Thursday net profit in the third quarter was
HK$1.7 billion ($219 million), c ompared with HK$1.17 billion a
year earlier. Adjusted EBITDA was HK$1.9 billion in the same
period, matching the forecast of five analysts polled by
Controlled by executives including Stanley Ho's fourth wife
Angela Leong, SJM is Macau's largest casino company by market
share compared with the six licensed players that include Steve
Wynn's Wynn Macau and Sheldon Adelson's Sands China
Valued at $13 billion, SJM last month said it had accepted a
draft land concession contract with the government in Macau,
where it plans to build a new casino. The casino company is not
present on Cotai, a developing strip of land across from the
main Macau peninsula.
The land concession contract will allow SJM to build in an
area in Macau where its competitors such as Sands China
dominate. SJM's project has received the greenlight from the
government, but the company is unlikely to open its new casino
before 2016 at the earliest.
Analysts view SJM as a defensive play armed with a strong
balance sheet of HK$18 billion in net cash. There are 17
analysts with a "buy" or "strong buy" rating, seven analysts
have a "hold" rating and one has a "strong sell" rating.