Bernstein Highlights 'Strong Performance' In Macau During Golden Week

• Melco Crown Entertainment Ltd (ADR) MPEL shares are down 32 percent year-to-date, and have been trading below the $20 mark since August 20.
• Bernstein’s Vitaly Umansky maintained an Outperform rating on the company, with a price target of $28.
• Channel checks had indicated robust business in Macau during the first five days of the Golden Week, Umansky reported.

Analyst Vitaly Umansky said that channel checks had indicated relatively robust business in Macau during the commencement of Golden Week. He estimates the ADR for the first five days in October to be in the range of MOP 850-900 million, representing growth of about 49-58 percent from the September figure.

Umansky elaborated that this growth is likely to have been achieved due to better-than-expected VIP and Mass business during these five days, and may have been partially offset by the Typhoon Mujigae disrupting flights and ferries in the region on October 4 and 5. Mainland visitor arrivals had risen 6.5 percent y/y, during the first five days of Golden Week.

“Overall though, we view the beginning of Golden Week as positive. However, investors will need to see solid results through the rest of the month in order to sustain the current stock price rally,” Umansky wrote.

The analyst projected October GGR at MOP 20.1 billion, representing a 28 percent y/y decline. This estimate assumes an ADR of MOP 620 million for the rest of October.

“Potential policy support from the Central Government may surprise on the upside,” Umansky mentioned. Although no specific details had been issued, the analyst expects the policies to be favorable for tourism and consumption spending in Macau.