Paradise Entertainment Plans Overseas Casino Equipment Push
[ Nov 15, 2013 ]
Paradise Entertainment Ltd. (1180), the supplier of gambling equipment in Macau, forecast a rise of at least 35 percent in sales next year and said it aims to expand overseas to sell its electronic table games outside the city.
Sales may rise by at least 35 percent next year as Macau casinos order more electronic table games, Chairman and Managing Director Jay Chun said in an interview in Macau yesterday. The company gets almost all its revenue from the world’s largest gambling hub.
The supplier to casino companies such as Sands China Ltd. (1928),SJM Holdings Ltd. (880) and Melco Crown Entertainment Ltd. (MPEL), has benefited from Macau’s transformation into the world’s largest gambling hub with six times the revenue of Las Vegas. Paradise Entertainment aims to expand into the U.S., Australia, Singapore, Cambodia and Vietnam, Chun said.
“There are about one million gaming machines in the U.S. right now, whereas Macau only has 16,000,” the executive said. “The U.S. market will definitely be our priority.” The company plans to accelerate expansion into the country next year, he said.
The stock climbed 5.2 percent to HK$3.64 in Hong Kong, the highest close since August 2009. The benchmark Hang Seng Index rose 1.7 percent.
Paradise Entertainment also manages the Kam Pek Paradise casino under the license of SJM, Asia’s largest operator, in the only city in China where casinos are legal. It aims to operate two more casinos in the Chinese city, Chun said, without disclosing details.
The company’s revenue rose 27 percent to HK$405 million in the first six months of the year.
The company currently accounts for 20 percent of the slot machine market in Macau and 60 percent of the electronic live table games market, Chun said. The Hong Kong-listed company expects sales for its slot machines to rise above 40 percent next year, he said.
Paradise Entertainment’s first-half profit dropped about 15 percent to HK$40.2 million because of aone-off disposal gain recorded in the same period a year earlier.
Sands China, Galaxy Entertainment Group Ltd. (27) and Melco Crown have been expanding on Cotai, a piece of reclaimed land that is Macau’s equivalent to the Las Vegas Strip. Smaller rivalsWynn Macau Ltd. (1128) and MGM China Holdings Ltd. (2282) are building their first resorts there.
The expansion is boosting the demand for gambling equipment such as Paradise Entertainment’smulti-games live table machines, which allow gamblers to play multiple games such as jackpot and baccarat at a terminal-based table with real-life dealers concurrently.
Located next to SJM’s oldest Lisboa casino in Macau’s peninsula, Kam Pek Paradise casino has 37 gaming tables, more than 900 live multi-game machines and over 300 slot machines, according to the company’s website.
Paradise Entertainment announced on Nov. 5 that it had raised about HK$77.6 million by issuing 33.7 million new shares at HK$2.3 each to two U.S.-based investment funds, according to a statementto Hong Kong stock exchange. The proceeds will be used as working capital, it said.
Gambling revenue in Macau increased 18 percent to 297.1 billion patacas in the first 10 months of this year, close to the $38 billion revenue raked in last year, as improved rail connection, added entertainment shows and hotel rooms drew more gamblers to the Chinese city.
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