alaxy and rivals including Melco Crown Entertainment and Sands China are competing for “premium-mass” gamblers, adding malls, theaters and restaurants at their resorts in Macau’s Cotai area, Asia’s answer to the Las Vegas Strip. An improved rail connection and an increase in hotel rooms are helping draw more vacationing Chinese, or mass-market gamblers, to Macau and the country’s only legal casinos.
“With the share price down 30 percent from peak levels four months ago (versus the Hang Seng Index down 2 percent over the same period), we believe concerns on a potential VIP slowdown are overdone,” Barclays Plc analysts Phoebe Tse and Vineet Sharma wrote in a note after the earnings. They rated Galaxy’s shares overweight.
The stock climbed 3.2 percent, paring this year’s decline to 13 percent.
Galaxy has approval to build as much as 2 million square meters of gross floor area on the Cotai strip, the most among the city’s six licensed casino operators. The company plans to quadruple the size of its Galaxy Macau resort by 2018.
Galaxy is spending HK$20 billion on the resort’s second phase in Cotai. The project is slated to add as many as 500 gaming tables and 1,300 rooms at JW Marriott and Ritz-Carlton hotels by mid-2015.
In its earnings statement, Galaxy said it expected to re-open by early next year the Grand Waldo casino complex, which it bought last year for HK$3.25 billion. Construction on the planned third and fourth phases of Galaxy Macau could begin as early as late this year, with an investment of at least HK$50 billion.
Galaxy said it was “also actively exploring new opportunities to expand into overseas markets.” Deputy Chairman Francis Lui said in an interview in November that the company would consider investing at least HK$20 billion in Japan or Taiwan each if those markets up.
Founder and Chairman LuiChe-woo and his family own about 51 percent of Galaxy, and he has an estimated net worth of US$18 billion, according to the Bloomberg Billionaires Index.