The Covid-19 pandemic has taken an unprecedented heavy toll on most of the world’s economies, particularly in touristrelated sectors such as the entertainment and gaming industries. The several waves of Covid-19 with evolution of different variants continued to place 2021 as a tough and challenging year. With stringent border controls and tightening social distancing measures in place, the number of visitors to Macau dropped significantly in 2021 and 2020 of about 80.4% and 85.0%, respectively as compared with that in 2019 with the normality before the pandemic, and accordingly Macau tourism and gaming industries were hit hard. First and foremost, I wish to sincerely express my deepest sympathy and warmest regards to the individuals and families who have been affected by this global pandemic, and to extend my gratitude to the medical frontiers and professionals in the public health care sector for their tireless efforts in combating the global pandemic not only for our generation but the next.

 

It goes without saying that the tourism and gaming industries have long been the pillars of Macau’s economy. It is good to note from the statistical information published by DICJ that Macau full year total GGR was MOP86.9 billion in 2021, representing a 43.9% improvement over that in 2020, but was down 70.3% as compared with that in 2019. In other words, the mild recovery in terms of Macau total GGR in 2021 over 2020 was still very far from the Macau total GGR of MOP292.5 billion in 2019 (Macau total GGR in 2021 represented only 29.7% of that in 2019). It is practically difficult to predict when Macau as well as Hong Kong and the world will start experiencing something close to a full recovery from the effects of the pandemic. One thing for certain is that the demand for gaming in Macau will continue to be weakened as a result of the mandatory control measures taken by the Macau government such as cross-border travel restrictions and safety social distancing measures if the pandemic situations fluctuate or even deteriorate.

 

Despite the uncertain and difficult business environment, we remain focused on our vision and mission. The Group will adhere to continuous innovation in the gaming equipment industry using top-notch and innovative technology to create more good gaming products that align well with casinos of mass market. This has been the cornerstone of our development. In this connection, we are pleased to report encouraging results and positive feedbacks, orders and reorders from the debut of our self-developed slot machines in the North American markets. Our self-developed slot machines are characterised by popular games which are straight-forward, simple and perfectly suited for high denomination areas with non-progressive, standalone progressive and linked-progressive options. Nevertheless, in the face of challenges such as the new coronavirus epidemic, the Sino-U.S. rivalry and the fluctuations in external markets, global economy in recession, unemployment rates in many countries on the rise, and financial markets in turmoil, etc., the Group will persistently be both prudent and proactive in expanding appropriate overseas markets.

 

Our flagship product, the LMG machines, has unique and distinctive features which fit well to meet the DICJ’s specific measures and requirements in view of the pandemic such as keeping a safe distance between gaming tables, and between gaming machines. Over the past years in time of pandemic, LMG machines serve to, on the one hand, improve operational efficiency of casinos, and on the other hand, provide an optimal solution to resolve the issue of the climbing labour costs of dealers and staff. We are confident that LMG machines have ample room for development in the future, both in the Macau and overseas gaming markets. According to the statistical information published by DICJ, Macau’s total LMG machines’ GGR for the year ended 31 December 2021 increased by 48.4% from MOP923 million to MOP1,370 million when compared with the year ended 31 December 2020. Total GGR of LMG machines at Casino Kam Pek Paradise for the year ended 31 December 2021 increased by 28.4% from HK$304.3 million to HK$390.7 million when compared with the year ended 31 December 2020. This highlighted the success of our casino management strategy embracing synergies of two principal business segments, namely, provision of casino management services and the development, sale and leasing of electronic gaming equipment and systems and showcased how we can fully utilise our patented high-tech innovative electronic table gaming experience into the casino managed by the Group, which aims to increase not only the operational efficiency, but also patrons’ gaming experiences.

 

No doubt, health is a major concern to every walk of life in this unprecedent time as the pandemic sweeping the world has cast a shadow over human health and the world. The Group continued to invest in research and development on AI and other related high-tech products in areas of education, sports and living etc. The Group was privileged to take part in the Fourth China International Import Expo which was held in Shanghai in early November 2021 to showcase our latest high-tech products of smart wearables series, smart sports series and the medical and health series. Some of our smart wear products have received very positive feedbacks and valuable opinions from users and enterprises, which were important to us for our strategy and business planning. The Group would adopt a prudent approach by continuously investing in and making efforts to contribute on innovations for the development of new products to be applicable on public hygiene and health aspects. We believe such investment strategy will create a solid platform for our future growth in both Macau and the global markets in the long run.

 

As regards to the recent announcement of the gaming law amendment bill titled “Amendment to Law No. 16/2001 — Legal Framework for the Operations of Casino Games of Fortune” by the Macau government, it is generally expected that the enhancement of the new regulations would be beneficial to the promotion of a sustainable and healthy development of Macau’s gaming industry. As the industry is majorly focused on the healthy development of the mass market, the diverse consistency of clientele in the mass gaming market is crucial to Macau’s economic diversification. Macau, being one of the focal points in the Guangdong-Hong Kong-Macau Greater Bay Area, the proposed gaming legislation fits to expedite Macau as a world centre of tourism and leisure, and fosters its diversified tourism development in the area. The Group has a strong will of continuing to provide efficient casino management services under the new regulations and will stay attentive to the development and identification of cooperation opportunities in order to contribute to the Macau gaming industry within the ambit of the new laws.

 

Last but not least, I would like to thank my colleagues including Board members, executives and other employees, as well as our Shareholders, customers and business partners for their unwavering support over the years and their courage and dedication in the face of adversity during this difficult period in time of the pandemic. I trust blue skies are ahead, and look forward to working with each of the stakeholders closely to emerge from this pandemic with optimism in the future.

Jay Chun
Chairman and Managing Director
Hong Kong, 24 March 2022