Operator News
Philippines – Morgan Stanley tips Okada Manila to be market leader
By Phil - 18 August 2017
Analyst group Morgan Stanley is tipping Okada Manila to take pole position in the Philippines’ market by 2019, surpassing Bloomberry, Melco Resorts Philippines and Resorts World Manila.
The firms Alex Poon and Praveen Choudhary said: “We expect Okada to add US$1.2bn of GGR by 2019 to the overall market, capturing 32 per cent market share (Bloomberry 30 per cent; Melco Resorts Philippines 25 per cent). This drives market GGR growth of 35 per cent CAGR over 2017-18 (VIP 43 per cent; Mass 30 per cent) for the integrated resorts or 25 per cent CAGR for the overall market.”
“We expect the Philippines gaming market to be the fastest growing in Asia (25 per cent CAGR in 2017-18) and cannibalisation is not our concern. We expect EBITDA of existing operators to grow sequentially in 2H17 and 2018 due to slow ramp of Okada, thus, Bloomberry and Melco Resorts Philippines 2018e EV/EBITDA of 6-7x and 10 per cent FCFE yield look attractive, compared to 8x based on 2Q17 EBITDA and net debt. Cannibalization is not visible in 2Q17. Strong tourist arrivals and NAIA Expressway have brought in more Chinese and Filipino mass customers from cities outside of Manila respectively.”
Okada Manila opened in March with only 100 of 993 hotel rooms open. Up to 30 per cent of its mass market tables are currently affected by construction work.
