Serving The High-Rollers Of Macau

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Serving The High-Rollers Of Macau
whekevi / Pixabay

Background

Wynn Macau Limited is ranked as the second-largest gaming company in Macau by casino revenue, and no. 1 in terms of exposure to VIPs.

The company operates two casinos, Wynn Peninsula and Wynn Palace, in Macau.

[REITs]

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Wynn Macau Limited

The resorts are well-known for their luxurious design, which attracts high-rollers.

Business Description

Nearly all of Wynn’s revenue comes from its two casino operations in Macau; these are the Wynn Macau (Peninsula), and the newer Wynn Palace, which opened in 3Q16. Around 57% of casino EBITDA is derived from the Peninsula, and the rest from the Palace. Non-casino segments, at 5% of sales, include five restaurants, a spa, lounge and bar areas, and a convention center.

The number of hotel rooms and suites at the Peninsula casino exceeds 1,000, while that at the Wynn Palace is around 1,700. The majority of clients at the combined facilities come from China and Hong Kong. Peninsula caters largely to the mass market, and the company has plans to boost market share thereby increasing the number of hotel rooms, and improving the eating and drinking facilities.

Nearly all of Wynn's revenue comes from its two #casino operations in #Macau

Wynn Palace, located in the Cotai strip of Macau, is targeting the VIP market. This market segment has seen a significant recovery since the peak in the anti-corruption drive of the Chinese government in 2016. Wynn increased its VIP market share to 18% in 3Q17 from 14% in 3Q16.

Leadership

Stephen A. Wynn is the founder of Wynn Resorts Ltd. and has been serving as the Chairman and the CEO of Wynn Macau since 2009. He has worked in the casino industry for over 40 years and holds directorships and other management positions in several subsidiaries of Wynn Resorts.

Stephen A. Wynn has been Chairman and CEO of Wynn #Macau since 2009

Ian Michael Coughlan was appointed the role of President of Wynn in 2009 after having served as the Director of Hotel Operations for Wynn resorts worldwide. He has a lot of experience in the industry and also holds a Diploma from Shannon College of Hotel Management, Ireland.

World Class Benchmarking

Profitable Growth dropped to become below average in 2016 from #1 in 2013 and 2014.

Profitability and Growth have also experienced a drop since 2013 but have recovered marginally in the past 12 months.

Profitable Growth at #Wynn dropped to become below average in 2016

Asset utilization has always been below average with some fluctuations while Profit margin has always been above average but with decreasing performance over the past couple of years.

Sales growth and Margin change have both stayed among the worst since 2014. However, Sales growth have recovered to the green in recent years.

Article by Become A Better Investor

In 1992 Dr. Andrew Stotz, CFA, left a management career at Pepsi-Cola in California to teach finance in Thailand. In 1993, he found his life calling as a financial analyst, a job for which he was eventually voted #1 in Thailand. In the second half of his 20-year career in investment banking, Dr. Stotz was a Head of Research, leading teams of financial analysts. He served as a two-term president of CFA Society Thailand and now runs his firm, A. Stotz Investment Research, which provides research and tools for institutions and high-net-worth investors and helps CEOs make their companies financially world class.
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