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Macau Gaming Stocks - February 2008

February 2008 was a very interesting month for Macau gaming investors, lots of movement going on for shareholders.



Most notable is the erosion of 15% of WYNN's value since their earnings report two weeks ago. Many analysts weren't particularly surprised by Wynn's mixed performance - flat in Vegas, strong in Macau - and expected a bit of a sell off after the numbers we're released. With the expansion of casino space this month, coupled with Chinese New Year Wynn Macau will most likely post some fabulous numbers next quarter.

It should be noted across the board that recent blizzards in China could temper all Macau gaming numbers, moreso for pureplayers MPEL and Galaxy.

MGM Mirage saw no real benefit to their stock price from the opening of MGM Grand Macau. Since the grand opening in December, our sources are saying the casino is doing very brisk business, particularly VIP play on weekends. Additionally, the Lion Bar has become the 'place to party' in Macau.

MelcoPBL (MPEL) roared back from the $7+ range to nearly double its price, adding 12% growth since late January, due to the first hard numbers of post-AMAX VIP play in Crown Macau's newly reconfigured casino. Like MGM, we'll probably know more about how Crown Macau is going to trend with the next quarterly report. It also seems that some investors peeled off some shares of MPEL when partial parent company Crown Limited announced investments in U.S. operators Harrah's and Stations Casinos. It will be interesting to see how Crown LTD's numbers impact MPEL and vice-versa, particularly as Crown LTD's Cannery acquisition plays out in LV and Pittsburgh. There is also the very realistic chance that Crown LTD will parlay weak US dollar into further buys in the U.S. gaming market, particularly Atlantic City.

Galaxy has been pretty mum on releasing any news, and has posted no new investor information for 2008. Construction is continuing at Galaxy MegaResortWorld or whatever they're calling it, but no numbers for StarWorld, Grand Waldo or the CityClubs have been released.

Things to watch

With Crown LTD and Harrah's now engaged in direct partnership, any movement by Harrah's related to their investment in the Cotai adjacent golf course would obviously be a boon for MPEL, as they obviously have the inside track on getting an operating agreement for any casino Harrah's will construct on the parcel. Harrah's may be willing to buck the current credit market disaster and make quick work building a mid-level property in the short term while plans for a full scale Caesars Cotai are drawn up for later.

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