nalysts Praveen K. Choudhary and Katherine Sun wrote in an investor’s note released on the weekend they retain their preference for Cotai players, namely Melco Crown Entertainment, Galaxy Entertainment Group and Sands China. They also upgraded SJM Holdings to ‘overweight’.
The two analysts expect the opening of Sands Cotai Central on April 11 to generate EBITDA of us$ 388 million in 2012 and us$ 827 million in 2013. “We see Melco Crown to benefit most from this opening and peninsula players to lose market share,” Choudhary and Sun added.
The Morgan Stanley analysts also say VIP growth is set for a rebound: “We are at the inflection point as we do not expect negative growth rate for VIP rolling chips seen in 2009.”
Looking at the results for the first quarter of 2012, Choudhary and Sun expect SJM and Sands to show positive EBITDA growth quarter-on-quarter, while others could see flattish or declining EBITDA.