Negative Near-Term Read-Throughs from the Detainment of Crown Resorts' Marketing Executives in China

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Thematic (Sector/Industry)

Hong kong Consumer discretionary / Thematic (Sector/Industry)

In our view, the Macau government’s proposal for declaration of cash and cash equivalents over MOP 120,000, or USD 15,000, at the border will not have a meaningful impact on gaming revenue. High-end players most commonly pay commissions to pawnshops to withdraw cash in Macau, or they use underground banks to wire money; therefore, they do not necessarily have to risk bringing cash across the border. We maintain our fair value estimates for the six Macau gaming stocks under our coverage: <a href="https://www.smartkarma.com/entities/182" target="_blank" data-smartkarma-citation="entities:182">Sands China Ltd (1928 HK)</a> , <a href="https://www.smartkarma.com/entities/473" target="_blank" data-smartkarma-citation="entities:473">Wynn Macau Ltd (1128 HK)</a> , <a href="https://www.smartkarma.com/entities/472" target="_blank" data-smartkarma-citation="entities:472">MGM China Holdings Ltd (2282 HK)</a> , <a href="https://www.smartkarma.com/entities/805" target="_blank" data-smartkarma-citation="entities:805">Sjm Holdings Ltd (880 HK)</a> , <a href="https://www.smartkarma.com/entities/806" target="_blank" data-smartkarma-citation="entities:806">Galaxy Entertainment Group Limited (27 HK)</a> , and <a href="https://www.smartkarma.com/entities/810" target="_blank" data-smartkarma-citation="entities:810">Melco Crown Entertainme Adr (MPEL US)</a> . The proposed bill is a result of recommendations by the Paris-based Financial Action Task Force, or FATF, to improve Macau’s anti-money-laundering measures, and did not originate from the Macau government or the central government with the aim of targeting capital outflow to Macau. However, we think there is a risk of future capital control measures that will limit mainland Chinese citizens' ability to transfer cash out of China to gamble in Macau.Analyst: Chelsey Tam

In our view, the Macau government’s proposal for declaration of cash and cash equivalents over MOP 120,000, or USD 15,000, at the border will not have a meaningful impact on gaming revenue. High-end players most commonly pay commissions to pawnshops to withdraw cash in Macau, or they use underground banks to wire money; therefore, they do not necessarily have to risk bringing cash across the border. We maintain our fair value estimates for the six Macau gaming stocks under our coverage: Sands China Ltd (1928 HK) , Wynn Macau Ltd (1128 HK) , MGM China Holdings Ltd (2282 HK) , Sjm Holdings Ltd (880 HK) , Galaxy Entertainment Group Limited (27 HK) , and Melco Crown Entertainme Adr (MPEL US) . The proposed bill is a result of recommendations by the Paris-based Financial Action Task Force, or FATF, to improve Macau’s anti-money-laundering measures, and did not originate from the Macau government or the central government with the aim of targeting capital outflow to Macau. However, we think there is a risk of future capital control measures that will limit mainland Chinese citizens' ability to transfer cash out of China to gamble in Macau.Analyst: Chelsey Tam

Lifestyle International Holdings (1212 HK)

Beijing Baofeng Technology Co (300431 CH)

Nanjing Xinjiekou Department S (600682 CH)

China Shipbuilding Industry Group Power (600482 CH)

Chinese Universe Publishing&Media (600373 CH)

Meinian Onehealth Healthcare H (002044 CH)

China Tourism Group Duty Free Corp Ltd (601888 CH)

Chongqing Changan Automobile Company (200625 CH)

Shenzhen Overseas Chinese (A) (000069 CH)

Beijing Gehua Catv Network Co, Ltd. (600037 CH)

Songcheng Performance Development (300144 CH)

Anhui Zhongding Sealing Parts Co, Ltd. (000887 CH)

Belle International Holdings (2129452D HK)

Sichuan Changhong Electric Co, Ltd. (600839 CH)

Hisense Visual Technology Co., Ltd. A (600060 CH)

Cash Declaration at Customs Not a Risk for Macau Gaming, but Potential Capital Control Measures Are