The slump in Star Entertainment Group’s share price following the Chinese arrests of Crown Resort’s employees was overdone, according to analysts.
A report from The Australian quotes Credit Suisse analyst Larry Gandler, who argues the Crown issue was not industry-wide, evidenced by stable Macau casino share prices.
“If there was a VIP crisis, would market share shifts from Australia to Macau explain stable Macau casino share prices? No,” he said.
“Australia holds just 5 per cent share in VIP globally and VIP margins are generally low,” he added.
Citi’s analyst, Rohan Sundram agreed that The Star looked cheap from price overreaction, and said he saw it as attractively priced.
“Of The Star’s direct VIP mix, we understand players are sourced largely from South East Asia rather than China,” Sundram said.
Shares in The Star were up 2.2 per cent on Tuesday afternoon, at A$5.08 ($3.87).