From: Courtney Gaskins <CGaskins@mercuryinsurance
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Expected pricing Friday, Oct 2. To trade Friday October 9 |
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Joint Lead Managers: J.P. Morgan Securities (Asia Pacific) Limited, Morgan Stanley Asia Limited, UBS AG, Hong Kong Branch, Merrill Lynch Far East Limited, Deutsche Bank AG, Hong Kong Branch |
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Co-Lead Managers: ABN AMRO Bank N.V., Hong Kong Branch, BNP Paribas Capital (Asia Pacific) Limited, CLSA Limited, GuocoCapital Limited |
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BIG DEMAND FOR $1.5BB WYNN MACAU HONG KONG IPO |
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A retail stock bubble? |
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The retail part of the offering was oversubscribed by roughly fiftyfold within the first few hours, Sept 26 read more |
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MACAU GAMBLING MARKET |
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Largest gambling market in the world. Only place to gamble legally in China. Within 3 hours of 1bb people. |
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China has quietly eased restrictions on its citizens travelling from Guangdong province to Macau, signaling a faster-than-expected recovery in the world's largest gambling market. |
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THE WYNN MACAU IPO |
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The Wynn Macau IPO is a 25% subsidiary company spin-off from Wynn Resorts |
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http://www.google.com/finance?q=NASDAQ:WYNN |
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34x forecasted earnings for the year ending Dec 31, 2009 |
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A second tower, the Encore, coming online soon, expected by June, 2010, almost doubling the current capacity |
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Wynn Macau has a track record of consistent profits, Wynn Las Vegas does not, see below |
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MACAU, CHINA |
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Located on the Pearl River Delta on the southern coastline of China’s Guangdong Province (China’s wealthiest, most urban and populous province). |
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Macau draws visitors from approximately ninety-five million residents of Guangdong and from the combined two billion residents of China, Taiwan, Japan, Korea, Thailand, Malaysia, Singapore, Indonesia and the Philippines located within an approximate four-hour flight from Macau. |
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An hour away via ferry from Hong Kong, a key transportation and visitor hub in the region and Asia’s third busiest airport after Tokyo and Beijing. Also lies in close proximity to many key Asian countries with favorable population and economic characteristics. |
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Macau visitors |
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China is the main source of Macau’s visitors, accounting for 50.6% of 2008 arrivals with Hong Kong accounting for a further 30.6% of 2008 arrivals. |
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Total visitors to Macau under China’s Individual Visit Scheme ("IVS") expanded at a CAGR of 61.8% from 2003 to 2008. Mainland China’s economic development, together with an increasingly affluent population, drive Macau’s economic growth. |
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RECENT DEVELOPMENTS |
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Recent Macau gaming revenue growth is likely to continue, benefiting casino operators with properties in the Chinese enclave, an analyst said Friday, Sept 25 read more |
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Wynn, Las Vegas Sands Rise as Analyst Sees Promising Sept. in Macau (WYNN, LVS), Sept 25 read more |
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Macau's gaming sector on track for recovery with record high monthly revenues, Sept 2 read more |
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USE OF PROCEEDS |
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$1.5bb (US) back to the parent |
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COMPETITION |
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Galaxy Entertainment Group Limited (Public, HKG:0027)
http://www.google.com/finance?q=HKG:0027 |
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Las Vegas Sands Corp. (Public, NYSE:LVS)
http://www.google.com/finance?q=NYSE:LVS |
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Melco Crown Entertainment Ltd (Public, NASDAQ:MPEL)
http://www.google.com/finance?q=NASDAQ:MPEL |
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WYNN MACAU |
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Prospectus |
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http://www.hkexnews.hk/listedco/listconews/sehk/20090924/LTN20090924064.PDF |
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Web site http://www.wynnmacau.com/en/ |
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Wynn Macau |
B-, 8 |
HKong $ to US$ convert ratio: 7.75 to 1 |
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Post-IPO |
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casino gaming/entertainment in Macau |
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08 |
09 |
shrs: 5bb |
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Macau, China |
2006 |
2007 |
2008 |
June 6 mos |
June 6 mos |
IPO Mkt |
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Rev ($mm) |
$296 |
$1,401 |
$1,898 |
$1,028 |
$859 |
Cap (mm) |
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Operating profit (loss) % |
-17% |
13% |
16% |
18% |
17% |
$6,503 |
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Profit (loss) ($mm) |
$758 |
$177 |
$263 |
$179 |
$119 |
@$1.30 |
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Profit (loss) % |
256% |
13% |
14% |
17% |
14% |
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Adjusted EBITDA $ |
$44 |
$316 |
$405 |
$239 |
$193 |
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Adjusted EBITDA % |
15% |
23% |
21% |
23% |
22% |
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note: 2006 profit includes $900mm gain on sale of subconcession right |
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VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
Price / |
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Cap (mm)* |
Sales |
Earnings* |
BookValue* |
TangibleBV |
EBITDA |
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Wynn Macau |
$6,503 |
15.1 |
34 |
3.8 |
67.2 |
16.8 |
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*assumes priced at high end of range |
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*Price / Forecasted 2009 earnings |
*BV adj for IPO |
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SCORECARD |
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Mgt |
Market |
Market Do- |
Proprie- |
Total |
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1-5, 5 is high |
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Growth |
mination |
tary |
rating |
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20 is perfect |
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2 |
3 |
2 |
1 |
8 |
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COMPARE & CONSTRAST |
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VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
Price |
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Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
9/25/2009 |
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Galaxy Ent (HKG:0027)* |
$13,980 |
2.5 |
51 |
13.0 |
15.7 |
$3.55 |
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*annualized 6 mos ending 6/30/09, operates at the lower consumer price range |
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LasVgs Snds(NYSE:LVS)** |
$11,620 |
2.7 |
-17 |
2.6 |
2.6 |
$17.60 |
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Melco Crown Ent(MPEL)** |
$3,290 |
3.8 |
-6 |
1.4 |
2.8 |
$7.42 |
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Wynn Resorts (WYNN)*** |
$8,650 |
2.8 |
85 |
4.7 |
4.8 |
$70.25 |
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**annualized June quarter 09, book value is pre IPO of Wynn Macau |
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Wynn Macau |
$6,503 |
15.1 |
34 |
3.8 |
67.2 |
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NOTICE THAT Wynn Macau has a better record of profits than Wynn Las Vegas |
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Wynn Las Vegas |
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Hkong $ to US$ convert ratio: 7.75 to 1 |
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casino gaming/entertainment in Las Vegas |
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08 |
09 |
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Las Vegas operations |
2006 |
2007 |
2008 |
June 6 mos |
June 6 mos |
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Rev ($mm) |
$1,136 |
$1,286 |
$1,089 |
$575 |
$604 |
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Profit (loss) ($mm) |
($130) |
$81 |
($53) |
$140 |
($207) |
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Profit (loss) % |
-11% |
6% |
-5% |
24% |
-34% |
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Net income for 2006 includes a pre-tax gain on sale of subconcession right of $900 million. |
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