NagaCorp

[valuebuddies]

NagaCorp was founded by Malaysian tycoon Tan Sri Dr Chen Lip Keong and attempted to list in SGX in year 2004 but was rejected by MAS. Then, the company successfully listed in HKSE in year 2006 under code 3918.HK.

A short details of the company as quoted from its website http://www.nagacorp.com:

NagaCorp owns, manages and operates the largest integrated gaming and entertainment hotel complex in Cambodia - NagaWorld. NagaWorld is the only licensed casino in the capital city of Phnom Penh. NagaWorld features a world-class 700-room hotel, 19 food and beverage outlets, and entertainment outlets.

NagaWorld is also widely recognized as a popular meetings, incentives, conventions and exhibitions ("MICE") facilities destination in Indochina. This includes 25,000 square meters of meeting and ballroom space, a stand-alone 6,500 square-meter ballroom, a 60-seat auditorium, and an exhibition space. There are also five luxury boutiques in NagaWorld, namely Cartier, Piaget, Rolex, Mont Blanc and Jaeger LeCoultre.

At the end of 2013, NagaWorld had 172 gaming tables and 1,543 electronic gaming machines in operation. With a built-up area of 113,307 square meters, NagaWorld's size and facilities position it as the leading integrated gaming and entertainment destination in Indochina.

With the recent slump in share price, it is now traded at 10 times PE, 6% dividend, zero debt, 40% EBIDA margin. It has a total market cap of HK$11B as of today.

[valuebuddies]

Some positive prospects that we may look forward:

i) NagaCorp has a 70-year casino licence that will run till 2065, as well as a 41-year monopoly within a 200km radius of Phnom Penh that expires in 2035

ii) Chinese high rollers seeking a more discreet alternative to Macau, after Beijing launched a crackdown on money laundering and ostentatious wealth there (http://www.ft.com/cms/s/0/53452978-bd9f-...z3TyMbXsXZ)

iii) The existing NagaWorld complex is reaching full capacity, and the Company is developing Naga2 which has a total built-up area of approximately 110,105 sqm with approximately 1,000 hotel rooms, 38 luxury VIP suites, a multipurpose-entertainment/theatre with a seating capacity of approximately 2,100; and additional gaming space (up to 300 gaming tables and 500 electronic gaming machines). Naga2 sets to commence from 1Q2016

iv) Developers are bullish on Cambodia economy, a numbers of luxury projects are under construction like http://www.valuebuddies.com/thread-5823.html and http://www.valuebuddies.com/thread-6246-...#pid107872

v) NagaCorp had entered into profit-sharing collaborations with few Macao junkets which brings more PRC to NagaWorld, this translate to substantially higher revenue for FY2014 and beyond. The said junkets includes Asian Nation, Suncity Group

vi) NagaCorp is proposing a US$369million casino in Russia Vladivostok, a location with proximity to Northern China, Korea and Japan; though currently pending for authority's approval and will not be operated until 2018

Negative side:

i) Gambling business in nature

ii) Regulatory risk (eg. what happened to Russia back in 2009)

iii) Risk of losing casino license due to political changes in Cambodia

[valuebuddies]

Recent announcements from the Company can be found from http://www.hkexnews.hk/listedco/listcone..._main.aspx

Noticed that the annual report for the year 2014 was just released to HKSE today [ http://www.hkexnews.hk/listedco/listcone...310467.pdf ]

[valuebuddies]

Cambodia nods 3 new casinos on its Vietnam border

http://www.ggrasia.com/cambodia-nods-3-n...am-border/

Three new casinos are to open along Cambodia’s border with Vietnam, reports the Phnom Penh Post newspaper, quoting a senior Cambodian official.

Ros Phearun, deputy director of the finance industry department at the Ministry of Economy and Finance, reportedly said the casinos will be located along the Vietnamese border in Takeo province’s Kiri Vong district. They are likely to serve players from Vietnam, stated the newspaper.

Vietnam also has casinos and is said to be planning more, but currently bars its own citizens from playing in them. Cambodia also bars its own citizens from gambling in its casinos, helping to boost the regional market for border establishments.

According to the Phnom Penh Post, Mr Phearun declined to disclose the names of the owners of the new Cambodian border casinos, or the capital investment involved, but did confirm they were locally owned.

Cambodia also has casinos on its border with Thailand, serving visitors from the latter country.

Many of Cambodia’s border casinos are locally owned, although larger firms such as Nasdaq-listed Entertainment Gaming Asia Inc (EGT) are also in the border market serving Thai customers. EGT has plans for new and larger casino projects in the region. Australia-listed Donaco International Ltd recently announced it too was entering Cambodia’s Thailand border trade.

In June, Mr Phearun said Cambodia’s government was planning to revise its gaming laws reportedly in order to make them stricter and more transparent, in a bid to attract extra foreign investment.

According to the Phnom Penh Post report on Thursday, the ministry is in the final stages of drafting a law specifically to manage casinos in the country. Casino operators in Cambodia pay a flat tax levied typically on the number of slot machines and gaming tables they operate, but the details can vary from operator to operator.

Last year, the gambling industry generated US$25 million in tax revenues from 59 casinos. The tax take increased 12 percent from 2013.

Currently the largest single investor in the country’s casino industry is Hong Kong-listed NagaCorp Ltd, which operates a monopoly venue in the capital Phnom Penh, called NagaWorld.

Vietnam is the largest source of visitors to Cambodia, with 900,000 Vietnamese coming to the kingdom in 2014, according to data from Cambodia’s Ministry of Tourism.

Cambodia and Vietnam are members of a regional club of sovereign states, known as ASEAN – the Association of Southeast Asian Nations. But the neighbours have longstanding tensions in bilateral relations.[/align]

[valuebuddies]

Since the starting of this thread, the share price has appreciated 17.8% in a short 1 month period. While I expect more upside potential for the stock but higher returns always associated with greater risk, please DYODD.

[valuebuddies]

Cambodia: new casino bill on way

A new casino bill for Cambodia aims to tighten a loosely regulated industry and is expected to appear before the National Assembly in the second half of this year.

Ros Phirun, a spokesman for the Ministry of Economy and Finance, said the bill will provide a legal framework to ensure the growing industry is more transparent and complies with international standards.

“The casinos in Cambodia are increasing in quantity but not quality which is why we need new regulations that are strong enough to regulate it properly,” Phirun told Asia Gaming Brief.

Cambodia’s tax department collected $25m from 59 licensed casinos in 2014, a year-on-year increase of 15 per cent. Despite the rise in revenue for the government, Phirun said the current taxation system relies on casinos paying a lump sum every month based on various factors including their location and size - rather than on their gross gaming revenues.

“To collect tax we just call on them to have a discussion and then we require them to settle their obligation every month. We currently do not collect the tax based on real revenue,” he said.

Phirun said the draft law will be reviewed before being sent to the Council of Ministers in the second quarter. After that it will be sent to the National Assembly to be approved.

______________________________

Not sure why markets are cheered by this news, share price has advanced from 5.24 on April fool day to 6.10 now

[valuebuddies]

Analyst report dated 10th April (if you read Chinese):

http://finance.sina.com.cn/stock/hkstock...8052.shtml

If you don't, please visit https://translate.google.com.sg/

[Gaudente]

this counter quoted 1$ five years ago and currently quotes almost 3 times its NAV while offering a P/E of almost 13 , I think it's extremely dangerous , it could easily plunge back to its 2$ NAV should profit fall , while I see no room for further upside.

[valuebuddies]

this counter quoted 1$ five years ago and currently quotes almost 3 times its NAV while offering a P/E of almost 13 , I think it's extremely dangerous , it could easily plunge back to its 2$ NAV should profit fall , while I see no room for further upside.

Is it true that the PE is nearly 13 times and the PTB is rather high, but the company has been consistently paying dividends twice yearly. The annual dividends paid were above HKD0.30 for the last 3 years which marks above 5% yield base on current share price. In fact my opinion is that PE is not really "high" considering of its monopoly status as well as upcoming catalyst in terms of increasing VIP customers from China, opening of Nagaworld 2, and its entrance into Russian market. As for the PTB, we did not take into the consideration of the intangible value of the monopoly license aren't we? How much do you think the monopoly license worth? And PE/cash flow method is probably better approach to value a asset light company like Nagacorp.

source: http://www.hkex.com.hk/eng/invest/compan...langcode=e

Just my 2 cents...

[dreamybear]

Another multi-bagger which I missed for being unfamiliar with the casino industry(only played jackpot before in my entire life), sigh .... 

In any case, it seems HK AGMs are still being conducted physically than virtually. Given the flight restrictions, it wld be great if they implement virtual AGMs like SG. 

"Taking into account the guidelines mentioned in the “Joint Statement in relation to General Meetings in light of the Prevention and Control of Disease (Prohibition on Group Gathering) Regulation” published by the Securities and Futures Commission and The Stock Exchange of Hong Kong Limited on 1 April 2020, the Company will implement the following precautionary measures at the AGM to ensure the safety of the Shareholders and participants attending the AGM: 
(i) at the entrance to the Venue, a compulsory body temperature check will be conducted on every person (including but not limited to, Shareholder or proxy or corporate representative) attending the AGM. Any person with a body temperature of over 37.3 degrees Celsius or who has any flu-like symptoms or is otherwise unwell will not be admitted to the Venue; ..... "
https://www1.hkexnews.hk/listedco/listco...600377.pdf

Joint Statement in relation to General Meetings in light of the Prevention and Control of Disease (Prohibition on Group Gathering) Regulation
https://www.sfc.hk/edistributionWeb/gate...fNo=20PR30