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

<ul>
<li>Nagacorp's 1Q23 and full year 2022 results confirm our prior call that Nagacorp revenues would ramp faster back to baseline 2019 than the market anticipates.</li>
<li>Trading at HKD$5.97 with a forward P/E of 13.18 makes the stock attractive early in the recovery cycle and headed higher as 1Q23 results indicate.</li>
<li>Superior management has always been a strength of Nagacorp. It has been recognized by Institutional Investor as Asia's #1 most honored company for investor relations and returns.</li>
</ul>


Nagacorp's 1Q23 and full year 2022 results confirm our prior call that Nagacorp revenues would ramp faster back to baseline 2019 than the market anticipates.
Trading at HKD$5.97 with a forward P/E of 13.18 makes the stock attractive early in the recovery cycle and headed higher as 1Q23 results indicate.
Superior management has always been a strength of Nagacorp. It has been recognized by Institutional Investor as Asia's #1 most honored company for investor relations and returns.


Asia Gaming: Nagacorp's Results Show Strong Covid Rebound Underway but Shares Still Undervalued

<ul>
<li>We have been bullish on Nagacorp for over three years. We long expected it to recover from covid damage on a pace propelled by rapidly easing travel bans.</li>
<li>Annual results show dramatic increases in GGR across almost all customer segments.</li>
<li>We see a return to double digit sales growth sustainable through the end of 1H this year.</li>
</ul>


We have been bullish on Nagacorp for over three years. We long expected it to recover from covid damage on a pace propelled by rapidly easing travel bans.
Annual results show dramatic increases in GGR across almost all customer segments.
We see a return to double digit sales growth sustainable through the end of 1H this year.


Recovery of ASEAN Casino Market Highlights Strength of Nagacorp Shares Upside to Come

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>Last evening, the CSRC and the SFC agreed to further deepen mutual stock market access between the Mainland and Hong Kong and promote the development of both capital markets.</li>
<li>For Southbound Stock Connect, eligible foreign companies primary-listed in Hong Kong will become eligible. That could mean 5 additions to Stock Connect.</li>
<li>Additionally, Southbound access via Shanghai Stock Connect will be expanded to being it in alignment with Shenzhen Stock Connect. That could see 131 stocks added to Shanghai Stock Connect.</li>
</ul>


Last evening, the CSRC and the SFC agreed to further deepen mutual stock market access between the Mainland and Hong Kong and promote the development of both capital markets.
For Southbound Stock Connect, eligible foreign companies primary-listed in Hong Kong will become eligible. That could mean 5 additions to Stock Connect.
Additionally, Southbound access via Shanghai Stock Connect will be expanded to being it in alignment with Shenzhen Stock Connect. That could see 131 stocks added to Shanghai Stock Connect.


Southbound Stock Connect Expansion: Potential Adds in 2023

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.

<p>Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).<br/> We view NagaCorp's ESG as "Weak" overall, in line with the Governance pillar, while its Environmental and Social scores are "Adequate". Controversies are "Material", but Disclosure is "Adequate".<br/></p>

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).  We view NagaCorp's ESG as "Weak" overall, in line with the Governance pillar, while its Environmental and Social scores are "Adequate". Controversies are "Material", but Disclosure is "Adequate". 

<ul>
<li>Within days of each other, news reports both bullish and bearish for the shares of this sector leader have diluted visibility of a strong bull case intermediate term.</li>
<li>Moody's downgraded Nagacorp debt due to continuing concerns about China's zero tolerance policy seeming to have no defined duration ahead. Lowered VIP also seen as bearish.</li>
<li>Another report within two weeks showed evidence of continuing strong recovery of Nagaworld GGR in VIP, premium mass and mass. Context is needed on all coveage.</li>
</ul>


Within days of each other, news reports both bullish and bearish for the shares of this sector leader have diluted visibility of a strong bull case intermediate term.
Moody's downgraded Nagacorp debt due to continuing concerns about China's zero tolerance policy seeming to have no defined duration ahead. Lowered VIP also seen as bearish.
Another report within two weeks showed evidence of continuing strong recovery of Nagaworld GGR in VIP, premium mass and mass. Context is needed on all coveage.


Nagacorp: Contrary News Flow Is a Symptom of How Volatility Can Hide True Value

Cambodia

NagaCorp Limited is a leisure and tourism company with casino operations in Phnom Penh, the capital city of Cambodia. The Company also offers hotel accommodation, manages food and beverage outlets, recreational facilities, entertainmentand retail operations.

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NagaCorp Ltd (3918 HK)

Asia Gaming: Nagacorp's Results Show Strong Covid Rebound Underway but Shares Still Undervalued

Nagacorp's latest earnings release shows highly positive trending post covid which is not as yet baked into the price as of 1Q23.

Howard J Klein

Recovery of ASEAN Casino Market Highlights Strength of Nagacorp Shares Upside to Come

Annual performance of Nagacorp signal a rapidly recovering revenue arc that is not as yet reflected in the tracing range of the shares which are...

Howard J Klein

Southbound Stock Connect Expansion: Potential Adds in 2023

Expansion to Southbound Stock Connect will include foreign stocks and eligibility will be aligned for Shanghai & Shenzhen. Preparation will take...

Brian Freitas

Nagacorp - ESG Report - Lucror Analytics

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We view NagaCorp's ESG as "Weak"...

Lucror Analytics

Nagacorp: Contrary News Flow Is a Symptom of How Volatility Can Hide True Value

News flow that sugests bearish outlook offset by ones showing bullish scenario. Investors need context to evaluate true value of this stock often...

Howard J Klein

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