Bernstein analysts are “skeptical” that Macau operator Sociedade de Jogos de Macau Holdings will meet its targets when the $5 billion Grand Lisboa Palace casino resort in Cotai opens with 300 gaming tables. The property will also have 1,034 slots. It will mostly open before the end of the quarter, according to SJM.
While SJM is confident of gaining a “better than fair [market] share” in Cotai, Bernstein analysts Vitaly Umansky, Louis Li, and Kelsey Zhu are skeptical. The competition on Cotai is fierce, and the product offering is equally so (and in often cases will be superior).
“The Grand Lisboa Palace product, according to management, is very popular among junkets. That may be the case – the Grand Lisboa Palace will take some junket share in the market. The margin, on the other hand, will be extremely questionable,” they added.
According to Credit Suisse analysts Kenneth Fong, Lok Kan Chan, and Rebecca Law, junket operators were “optimistic about prospects at the property” and “eager to start operations,” according to management.
“Premium mass operations and marketing are ready to go. Grand Lisboa Palace’s success will largely be determined by its ability to execute in that highly competitive segment,” they explained.
The Grand Lisboa Palace, the Group’s integrated resort on Cotai, has been completed. The project is undergoing final inspections by local government authorities, according to SJM. The Grand Lisboa Palace is most likely to open in the first half of 2021, according to the Group.”
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