|Shares Out. (in M):||5,195||P/E||28||26|
|Market Cap (in $M):||56,600||P/FCF||0||0|
|Net Debt (in $M):||75,000||EBIT||0||0|
|Borrow Cost:||Available 0-15% cost|
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Investment Thesis – Wynn Macau (SEHK: 1128)
Recommend Wynn Macau as a short, as we see risks of further 25-30% declines for several reasons outlined below. The key thesis is that the revenue model is challenged due to i) chinese anti-corruption crackdown continuing, ii) upcoming big supply/competition, iii) costs escalating impacting margins/ROIC and iv) leverage. While it is no secret that Macau has problems, upcoming supply and continued regulatory risks mean at current valuations, stock are expensive as top-line is challenged, operating expenses rise (supply) and estimates are continued to be lowered. If the anti-corruption campaign is reversed, this would be a stock to own, but persistent regulatory risks currently pose a concern to the revenue model.
• Anti-corruption campaign unleased by China a tsunami event for Macau “revenue model”
Risks to thesis
Other Macau related links:
Disclaimer: The write up is not investment advice or a recommendation or solicitation for any fund or to buy or sell any securities now or at any time. The author and related persons may hold a position and make no representation that it will continue to hold long or short positions in the securities and disclaims any obligation to notify the market of any changes. The author and related persons may change its views about or its investment positions at any time, for any reason or no reason. This includes buying, selling, covering or otherwise changing the form or substance of its investment. The author disclaims any obligation to notify the market of any change. The information and analysis presented is based on publicly available information through filings, sell-side research, industry analysts and/or company or otherwise sourced. The author recognizes that there may be non-public information in the possession of the company or others that could lead the company or others to disagree with the author's analyses, conclusions and opinions. Any forecasts or estimates should not be relied upon (not the least due to the disclosure) and could turn out to be incorrect. While the author has tried to present the facts it believes are accurate, the author makes no representation or warranty, express or implied, as to the accuracy or completeness of the write up, and expressly disclaims any liability relating to the write up or such communications (or any inaccuracies or omissions therein). Thus one should conduct their own independent analysis before independently considering a position in securities. Except where otherwise indicated, the write up speaks as of the date, and the author undertakes no obligation to correct, update or revise the write up or to otherwise provide any additional materials.
Regulatory risks, Chinese anti-corruption not slowing down, leverage, supply/competition.
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