Report

Going against the prevailing market sentiment

On 21st March 2017, AMC Wanhai, going against the prevailing market sentiment, initiated ‘Buy’ recommendation on SJM Holdings Ltd (880.HK) with target price of HKD 8.50. Since then, the company’s share price has seen a strong up-move, gaining 23.37% to reach its current price of HKD 7.94 in less than three months; in comparison, Hang Seng has increased by 6.2% during the same period

Macau’s gaming sector is on a strong upward trajectory. The fundamental strength of the sector is further buttressed by the stupendous May GGR growth of 23.7%, considerably higher than market expectations of 16.5% growth. May’s blockbuster GGR numbers were a result of continued strong mass market growth (in the high teens), acceleration of VIP segment growth and incremental business brought by the new properties (contrary to fears that they will cannibalise the existing properties). We believe the party has just begun for the sector and there is still plenty of headroom till it realises its full potential. 

Underlying
SJM Holdings

SJM Holdings is an investment holding company based in Hong Kong. Co. is the holding company of Sociedade de Jogos de Macau and is engaged in the development and operation of casinos and related facilities in Macau Special Administrative Region, the People's Republic of China. Co.'s casinos are located in prime locations on the Macau Peninsula and Taipa Island. Gaming operations are comprised of VIP table gaming, Mass Market table gaming and slot machines. Co. is organized in two segments: Gaming Operations (operation of casinos and related facilities); and Hotel and Catering operations (hotel, catering and related services).

Provider
AMC Wanhai Securities Ltd.
AMC Wanhai Securities Ltd.

AMC Wanhai Securities is an independent boutique brokerage covering Hong Kong & Asian listed equities for global institutional cilents. The company focuses on equity sales & trading, equity research, asset management and corporate finance.

AMC Wanhai Securities will give you a snapshot of stocks from across a range of sectors, with ratings and recommendations that will help you make tactical investment decisions. Additionally, we issue sector / thematic report providing deeper insights into wider trends and business drivers.

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