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>In last month's insight, we noted that Melco was poised for an upside as it was among the most seriously undervalued stock in the sector. </li>
<li>Despite continuing covid travel ban related losses in 3Q22 earnings release, we saw an upside coming in near term catalysts.</li>
<li>Improving performance by 1Q23 will turn sentiment even stronger as the bull case materializes due to positives now poised in place.</li>
</ul>


In last month's insight, we noted that Melco was poised for an upside as it was among the most seriously undervalued stock in the sector. 
Despite continuing covid travel ban related losses in 3Q22 earnings release, we saw an upside coming in near term catalysts.
Improving performance by 1Q23 will turn sentiment even stronger as the bull case materializes due to positives now poised in place.


Asia Gaming: Raising Recent Guidance on Melco Resorts as Catalysts Begin to Move Market Sentiment

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.

Credit

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:<ol><li><a href='/entities/china-sce-group-holdings-ltd' target='_blank' rel='noopener'>China SCE</a></li><li><a href='/entities/hopson-development-holdings' target='_blank' rel='noopener'>Hopson Development</a></li><li><a href='/entities/sino-ocean-group-holding-limited' target='_blank' rel='noopener'>Sino-Ocean Group</a></li><li><a href='/entities/greentown-china-holdings' target='_blank' rel='noopener'>Greentown China</a></li><li><a href='/entities/china-jinmao-holdings-group' target='_blank' rel='noopener'>China Jinmao Holdings</a></li></ol>and more...

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:China SCEHopson DevelopmentSino-Ocean GroupGreentown ChinaChina Jinmao Holdingsand more...

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We view Melco Resorts' ESG as "Adequate", though bordering on "Strong". The company's Environmental and Social pillars are "Strong", while Governance is "Adequate". 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 view Melco Resorts' ESG as "Adequate", though bordering on "Strong". The company's Environmental and Social pillars are "Strong", while Governance is "Adequate". Controversies are "Immaterial" and Disclosure is "Strong". 

Melco Resorts - ESG Report - Lucror Analytics

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Melco International Development / Event-Driven

<ul>
<li>On the 26 November, Macau’s government renewed the concession periods of the city’s six incumbent gambling concessionaires for another 10 years.</li>
<li>
<a href="https://www.smartkarma.com/entities/genting-malaysia-bhd" target="_blank" data-smartkarma-citation="entities:3141:1" rel="noopener">Genting Malaysia (GENM MK)</a><a href="https://www.smartkarma.com/entities/genting-malaysia-bhd" target="_blank" data-smartkarma-citation="entities:3141:1" rel="noopener"></a>, a last-minute interloper, failed in its bid to secure a license. It scored lowest under the government's bidding review. <a href="https://www.smartkarma.com/entities/mgm-china-holdings-ltd" target="_blank" data-smartkarma-citation="entities:472:1" rel="noopener">MGM China (2282 HK)</a> topped the scoresheets. </li>
<li>As with all incumbents, <a href="https://www.smartkarma.com/entities/melco-international-development-ltd" target="_blank" data-smartkarma-citation="entities:809:1" rel="noopener">Melco International (200 HK)</a> and <a href="https://www.smartkarma.com/entities/melco-crown-entertainme-adr" target="_blank" data-smartkarma-citation="entities:810:1" rel="noopener">Melco Resorts &amp; Entertainment (MLCO US)</a> eked out strong gains following the renewal. Melco's current discount to NAV is currently 20%.</li>
</ul>


On the 26 November, Macau’s government renewed the concession periods of the city’s six incumbent gambling concessionaires for another 10 years.

Genting Malaysia (GENM MK), a last-minute interloper, failed in its bid to secure a license. It scored lowest under the government's bidding review. MGM China (2282 HK) topped the scoresheets. 
As with all incumbents, Melco International (200 HK) and Melco Resorts &amp; Entertainment (MLCO US) eked out strong gains following the renewal. Melco's current discount to NAV is currently 20%.


Where Does Melco's Discount To NAV Go From Here?

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.

  The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market. 

Asia HY Monthly - November 2022 - Lucror Analytics

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)

Asia Gaming: Raising Recent Guidance on Melco Resorts as Catalysts Begin to Move Market Sentiment

Positive catalysts continue to multiply for Melco against a vastly undervalued trading range that has begun to move north. The timing is right to...

Howard J Klein

Weekly Wrap - 09 Dec 2022

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and...

Lucror Analytics

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 view Melco Resorts' ESG as...

Lucror Analytics

Where Does Melco's Discount To NAV Go From Here?

Melco has a tendency to overshoot to the upside, therefore I'd be inclined to go Long Melco here and Short MCLO here as more positive news unfolds....

David Blennerhassett

Asia HY Monthly - November 2022 - Lucror Analytics

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top...

Lucror Analytics

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