Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We assess Melco Resorts' ESG as "Adequate", in line with its Social and Governance scores. The Environmental pillar is "Strong". Controversies are "Immaterial" and Disclosure is "Strong".

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).  We assess Melco Resorts' ESG as "Adequate", in line with its Social and Governance scores. The Environmental pillar is "Strong". Controversies are "Immaterial" and Disclosure is "Strong". 

Melco Resorts - ESG Report - Lucror Analytics

Credit

Melco Resorts (MLCO)'s H1/23 results were soft, mainly as its Macau properties underperformed in Q1. That said, the company regained some market share in Q2, as GGR from its Macau properties climbed 43% q-o-q. Q2/23 mass market GGR reached 84% of the Q2/19 level, albeit still marginally below the industry figure of 86%. We expect MLCO's mass market GGR in Macau to continue improving going forward, supported by the opening of Studio City Phase 2. In our view, the main credit concern is the company's aggressive stance towards shareholder returns. This is evidenced by MLCO's small share repurchases throughout the COVID-19 pandemic (between FY 2020 and FY 2022), despite its severely deteriorated balance sheet. Moreover, the company has a history of providing cash support to parent Melco International.

  Melco Resorts (MLCO)'s H1/23 results were soft, mainly as its Macau properties underperformed in Q1. That said, the company regained some market share in Q2, as GGR from its Macau properties climbed 43% q-o-q. Q2/23 mass market GGR reached 84% of the Q2/19 level, albeit still marginally below the industry figure of 86%. We expect MLCO's mass market GGR in Macau to continue improving going forward, supported by the opening of Studio City Phase 2.   In our view, the main credit concern is the company's aggressive stance towards shareholder returns. This is evidenced by MLCO's small share repurchases throughout the COVID-19 pandemic (between FY 2020 and FY 2022), despite its severely deteriorated balance sheet. Moreover, the company has a history of providing cash support to parent Melco International. 

Melco Resorts - Earnings Flash - H1 FY 2023 Results - Lucror Analytics

Global Gaming and Casinos Industry Specialist, Casino Business Review LLC

Howard J Klein

Global Gaming and Casinos Industry Specialist

Casino Business Review LLC

Extensive experience in marketing and development in the Asian gaming market

Global Gaming and Casinos Industry

Equity Bottom-Up

Melco Resorts & Entertainment / Equity Bottom-Up

<ul>
<li>From 2022 loss in period, MLCO earnings could come in anywhere between a profit of $0.06 to $0.70 indicative of recovery in Macau, Manila and opening of Cyprus.</li>
<li>Revenue could come in above $1.2b. This is a forerunner of a solid recovery year.</li>
<li>MLCO has a global vision beyond Asia that makes it attractive at its current price.</li>
</ul>


From 2022 loss in period, MLCO earnings could come in anywhere between a profit of $0.06 to $0.70 indicative of recovery in Macau, Manila and opening of Cyprus.
Revenue could come in above $1.2b. This is a forerunner of a solid recovery year.
MLCO has a global vision beyond Asia that makes it attractive at its current price.


Melco Resorts: Upcoming Earnings Release Next Month Could Beat Due to Macau, Manila, Cyprus Upsides

<ul>
<li>Melco has lagged other Asian operators as Macau recovery pits up speed. Concerns over debt levels continue.</li>
<li>Fair value estimated slightly above current trade largely reflecting 2022 results.Maca</li>
<li>Macau and Manila tracking positive, Cyprus could provide accretive EBITDA before end of this year and beyond/</li>
</ul>


Melco has lagged other Asian operators as Macau recovery pits up speed. Concerns over debt levels continue.
Fair value estimated slightly above current trade largely reflecting 2022 results.Maca
Macau and Manila tracking positive, Cyprus could provide accretive EBITDA before end of this year and beyond/


Melco: Imminent Opening of Its Cyprus Resort Show Possible Upside in Sentiment Among Wary Investors

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.<ul><li><a href='#lucror-entity-810'>Melco Resorts & Entertainment</a></li><li><a href='#lucror-entity-182'>Sands China</a></li></ul>

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.Melco Resorts & EntertainmentSands China

Morning Views Asia: Melco Resorts & Entertainment, Sands China

Hong Kong

Melco Resorts & Entertainment Limited develops, owns, and operates casinos. The Company offers casino gaming, restaurants, bars, and resorts facilities. Melco Resorts & Entertainment serves customers in Asia.

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Melco Resorts & Entertainment (MLCO US)

Melco Resorts - ESG Report - Lucror Analytics

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We assess Melco Resorts' ESG as...

Lucror Analytics

Melco Resorts - Earnings Flash - H1 FY 2023 Results - Lucror Analytics

Melco Resorts (MLCO)'s H1/23 results were soft, mainly as its Macau properties underperformed in Q1. That said, the company regained some market...

Lucror Analytics

Melco Resorts: Upcoming Earnings Release Next Month Could Beat Due to Macau, Manila, Cyprus Upsides

The shares of MLCO have lagged the recovery cycle of Macau peers. We believe they have overcome some structural problems and now present...

Howard J Klein

Melco: Imminent Opening of Its Cyprus Resort Show Possible Upside in Sentiment Among Wary Investors

MLCO shares have lagged peers in post covid recovery but imminent opening of its new Cyprus project could be catalyst for upside.

Howard J Klein

Morning Views Asia: Melco Resorts & Entertainment, Sands China

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region,...

Lucror Analytics

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