2022 proved to be another year in a row of unprecedented challenges to the gaming and entertainment industry and many others, yet it has been a year marked with both “change” and “hope”.


The business and financial performance of the Group for the year ended 31 December 2022 was still adversely affected by the Covid-19 pandemic, exacerbated by the rising uncertainty of the macro-economic environment, including the escalation in geopolitical tensions, and the global surging inflation and interest rate hike, etc. Nevertheless, we began to see some positive and encouraging signs starting towards the year end as the Covid-19 situation was gradually under control as compared with the beginning of 2022 in Hong Kong as well as Macau, coupled with the fact that cross-border travel between Mainland China, Hong Kong and Macau has fully resumed from 6 February 2023. We are pleased to see a rebound in tourist arrivals and an increase in economic activities in Macau after the city has cancelled from 8 January 2023 most of its travel restrictions related to the Covid-19 pandemic. Furthermore, the new contracts for the 10-year gaming concession entered into between the Macau government and the six newly-reinstalled Macau concessionaires in December 2022, coupled with the passing of new gaming law in Macau in June 2022, has mitigated the uncertainty and imminent regulatory risk relating to the expiration of the gaming concessions in 2022, which had been acting as one of the main stumbling blocks to investment in the region.


Looking back at 2022, the Covid-19 pandemic continued to wreak havoc across the globe along with its several variants and we were still experiencing certain scale of outbreaks from time to time. In Macau, we saw initial revival in the first quarter of 2022 as domestic health threats eased and the general economy turned a corner from months of downturn, up until mid-June 2022 when a new wave of highly transmissible Omicron sub-variants brought a sharp and sudden spike in Covid-19 infection cases. In order to contain these flare-ups swiftly, the Macau government made the decisive response to issue two executive orders in July 2022 and suspended the operations of all non-essential industrial and commercial companies (including all casinos) for certain periods of the month. Even though most of the Macau casinos were allowed to reopen in mid-July 2022 with limited operations, the movement across borders with Mainland China, Hong Kong and overseas countries was still subject to quarantine and other travel restrictions. According to published statistical information, GGR in Macau was MOP42.2 billion in 2022, representing a decrease of 51.4% from that of 2021 and was just 14.4% of that of the pre-pandemic level of 2019. Similarly, the number of visitors to Macau tumbled by 26.0% from 7.7 million in 2021 to 5.7 million in 2022, which was just 14.5% of that of the pre-pandemic level of 2019, leaving casinos in Macau devoid of customers. Against the backdrop of the Covid-19 situation and the complex global business environment, the Group’s gaming business in Macau was inevitably affected. The Group’s reported revenue for the year ended 31 December 2022 was HK$297.8 million, representing a slump of 39.7% over that for the year ended 31 December 2021; and the Group’s Adjusted EBITDA for the year ended 31 December 2022 was a loss of HK$109.0 million, as compared with Adjusted EBITDA of loss of HK$18.4 million for the year ended 31 December 2021. In tandem with various cost saving measures taken to contain the expenditure, our self-developed slot machines business expansion to the North American markets as well as the related research and development activities have been slowed down. The pandemic has given us a difficult time to go through, but also sent us challenges to bolster our inner strength.


During the year under review, the Macau government passed the new gaming law on 21 June 2022, which served to provide new regulations and guidelines for the healthy and orderly development of the Macau gaming industry including satellite casinos, and further signed a new gaming concession contract on 16 December 2022 with each of the six awardees of a Concession Agreement on Operating Games of Luck in Casinos in Macau. The new contracts have come into effect on 1 January 2023, with a term of ten years. We are pleased to note that SJM Resorts is one of the six awardees and are privileged to sign a new service contract with SJM Resorts on 30 December 2022 for our provision of casino management services in Casino Kam Pek Paradise (which operates under SJM Resorts’ gaming concession) for the period from 1 January 2023 to 31 December 2025. On 15 December 2022, the Macau Legislative Assembly has unanimously passed the “Legal Framework for the Operations of Casino Games of Fortune”, the law which regulates the rules of operation of gaming junkets and management companies in Macau. Upon the granting of the new gaming concessions and the introduction of the new legal framework, Macau’s gaming and tourism industries are stepping forward into a new era of development. The Group is ready to capture new cooperation as well as business opportunities focusing on mass market arising from the regulatory changes within the ambit of the new gaming law.


In alignment with the Group’s strategic initiatives to develop a diversified business portfolio, on 22 December 2022, the Group was pleased to announce that Mr. Zhang Jianjun has been appointed as an executive Director and a Co-chairman of the Board. Given Mr. Zhang’s profound experience in investment banking, financial investment, asset restructuring and management and other areas, and given his work experience in industries providing innovative new or renewable energy solutions, big data for health and consumption, and digital financial technology, we have confidence that he could and will help promote the Group’s businesses as well as identify and explore new business opportunities to achieve new breakthroughs for the Group.


Looking forward, as more countries and regions have reopened borders and eased social distancing measures, in particular the full opening of borders between Mainland China, Macau and Hong Kong, it is expected that visitation and spending in Macau and in turn the Macau gaming industry, which the Group is principally engaged in, will respond positively and the worst time has passed. However, there remains uncertainties around aggressive interest rate hikes, soaring inflation and geopolitical tensions that might derail the global economic recovery. Despite such uncertainties, the Group is optimistic about the rebound of Macau’s economic situations reeling from Covid-19’s aftermath in particular since the gaming industry is now well-poised to a gradual revival with the enactment of new gaming law and the grant of new gaming concessions pursuant to the new gaming law. We continue to hold optimism for the Group’s medium to long term prospects.


Lastly, we would like to take this opportunity to express our sincere appreciation to our Shareholders, customers and business partners for their continuing support to the Group, and all staff members for their dedications and hard work over the years.


On behalf of the Board

Dr. Jay Chun
Co-chairman and Managing Director
28 March 2023