Rebranding a key word for casino operators
Many Hong Kong investors do have a crush for Macao gambling stocks, and it’s easy to understand why. All you need to do is to look at how casino bosses had been lionized in many popular Cantonese movies and television dramas in the past.
To most people, owning some casino stocks is the closest thing to becoming the gambling magnate who cannot to lose in movieland, as well as in real life, because the odds are always stacked in favor of the house. It’s rather a matter of how much money the casino is making compared to the industry average.
You’ ll soon get an update when the casinos show their annual results in coming weeks. Analysts expect each of them to see higher 2016 earnings from the previous year. But, that’s not necessarily the most important piece of information you need to help you make up your mind in picking the best buy among the group.
This time, the key to arriving at a wise decision is finding out how successful individual casinos have been in developing their nongambling businesses. In the past few years, several casino operators had invested heavily in building new resort facilities to attract the so-called casual gamblers and family vacationers.
You can bet they didn’t spend that sort of money on the roll of the dice. They had to do it because the high rollers, mainly from the Chinese mainland, who provided the casinos their biggest source of income, aren’t coming back in droves any time soon.
The casino operators and the Macao government saw the urgency for some serious rebranding, or risk a prolonged business slump. Reportedly, their efforts have met with some success. In recent months, the ratings of Macao casino stocks by various investment houses in Hong Kong had gone up considerably.
Gaming income is rolling in once again, reversing a years-long downturn. But, the total amount pales in comparison to that of the heyday years ago.
Some analysts have now given casino stocks the coveted “buy” rating. The bet is on those that have shown a track record of successful diversification.