汇丰银行-亚洲行业策略-korea gaming：another weak quarter ahead-20170704-hsbc

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1、4July2017KoreaGamingEQUITIESHOTELSRESTAURANTS&LEISUREAnotherweakquarteraheadKoreaKoreagamingnamestodeliveryetanotherweakquarter;keyJenaHan*focuswouldbeParadiseCity’simpactonexistingsitesAnalystTheHongkongandShanghaiBankingCorporationLimited,SeoulSecuritiesBranchWest

2、aybearishonforeigner-onlycasinooperatorsgivenstilljenahan@kr.hsbc.com+82237068772weakChineseVIPdemandandloomingoversupplyriskCharleneLiu*HeadofGamingResearch,Asia-PacificKWL(Buy)isourpreferredsectorpick;preferGKL(Hold,TheHongkongandShanghaiBankingCorporationLimited,Singa

3、poreBranchraiseTPby4%toKRW24,000)overParadise(Reduce)charlene.r.liu@hsbc.com.sg+65665806152Q17etobeweak,again.Koreagamingcompanieswillreport2Q17resultsinearly-*Employedbyanon-USaffiliateofHSBCSecurities(USA)Inc,andisAugust.Weexpectoperationstobeweakacrossallplayers.Keypoi

4、ntsworthnotingare:notregistered/qualifiedpursuanttoFINRAregulations(1)KangwonLand–visitationlikelyremainedsoft(-2%y-o-y)amidongoingpoliticalturmoilresultinginslowrevenuegrowthacrosssegments;worthcheckingwhetherthetrendhaspickedupinJune;(2)GKL–cannibalizationfromcompetitor

5、’snewopeninglikelyledtonegativesalesgrowth(-6%y-o-y);and(3)Paradise–ParadiseCityearningswillkickinfrom2Q17e,weshouldbeabletogaugethesite’srevenue/profitpotential.Concernsoncannibalizationmayreignite.WeremaincautiousonGKLandParadiseasitisapparentthatVIPdemandisnotimproving

6、.Byindustry,ChineseandJapaneseVIPvisitstayedflattishoverJan-May.WhilebothplayershavebeenmoreaggressiveinattractingJapanesetraffic,itwillbeinsufficienttoincrementallybenefittheiroperations,asJapaneseVIPs’averagedroppervisitorislessthan50%thatofChineseVIPs.Againstsuchweakde

7、mandbackdrop,cannibalizationfromParadise’snewintegratedresort(IR)isakeyconcern.AsmentionedinourlatestParadisenote(Paradise–Reduce:Mayresultssoftdespitenewcasino,7June2017),cannibalisationlookstohavebeguninApril-May.Whileitwasexpectedduringtheinitialphase,webelieveitshould

8、soonspill✔VoteinAsiamoneyBrokersPoll2017overtoGKLandpersistlongerthanthoughtgivenweakVIPdemand.V