VIP holds strong
Analyst Grant Govertsen of Union Gaming Securities Asia Ltd. predicts that Summit Ascent Holdings’ Tigre de Cristal resort on the Black Sea in Russia will continue to perform well over the next two years.
“We expect monthly VIP volume to be approximately HKD2 billion (US$257.8 million) in the second half of 2016, HKD2.4 billion in 2017 (+19 percent year-on-year), and HKD2.8 billion in 2018 (+17 percent year-on-year),” Govertsen wrote last week.
“These growth rates are broadly in line with what we’ve seen in other jurisdictions as their VIP programs have ramped,” he continued. “We note that our 2018 VIP forecast results in Tigre de Cristal being around 1.0 percent of Macau’s VIP market size (from 0.6 percent in the second half of 2016).”
Thanks to Tigre de Cristal’s two junket rooms, which launched in late June, the casino has posted notable growth in VIP play, according to numbers reported in GGRAsia. Govertsen said that monthly high-roller volumes at the property had almost tripled to HKD2 billion since July.
Tigre de Cristal “is generally a VIP-focused casino, although its current underlying mass market business effectively covers almost all property operational expenses,” Govertsen observed. He expects mass gaming table volumes to grow between 8 percent and 9 percent in 2017, to RUB4.82 billion (US$77.5 million).
Not surprisingly, he issued a “buy” rating on shares in the company, which is controlled by Macau gaming magnate Lawrence Ho.
Tigre de Cristal opened in October 2015 and is the only casino in operation in the Primorye Integrated Entertainment Zone, a casino development area near the Pacific port of Vladivostok.
Phase II of the property will add new hotel rooms, shops, conference facilities and restaurants along with 100 VIP gaming tables, 70 mass tables and 500 slot-machine and electronic gaming machine positions. The expansion is expected to cost about US$500 million. According to Union Gaming’s note, the addition “will represent an entirely new resort (rather than an expansion” of the property.
A total of four licenses have been granted for casino resorts in the IEZ. Hong Kong-listed NagaCorp Ltd. is expected to be the second firm to open in the summer of 2018.
