NagaCorp’s winning streak is expected to continue, following positive 15Q3 results, as new initiatives bear fruit, according to Morgan Stanley research.
NagaCorp reported 58 percent YoY growth in gross gaming revenue to $14.4 million driven by both VIP and mass.
MS says that table drop facilities installed in July, stronger marketing with agents selling chips to customers at discount and TITO installed by end September “started bearing fruit in 3Q1.”
“We expect momentum to continue.”
Regarding the VIP market, MS said there was strong organic and inorganic growth with margin improvement potential in 2016.
“Both Jimei (fixed 7 tables at Aristocrat) and Suncity (casual basis) started contributing to VIP volumes in 3Q15. Overseas junkets continued to contribute >70% of total volumes.”
“The company plans to scale down its revenue sharing with junkets to 70% (max) in early 2016 and this could improve margins.”