“Wynn-ing” in Macau

+2.35%
Upside
102
Market
105
Trefis
WYNN: Wynn Resorts logo
WYNN
Wynn Resorts

Wynn Resorts (NASDAQ:WYNN) is poised to benefit from the growth in the Macau gaming industry that saw gaming revenues continue its surge, increasing 45% in April from a year earlier. [1] Wynn operates in Macau through Wynn Macau and Wynn Encore and is expected to open another resort in the Cotai region by 2015. Wynn’s primary competitors in the Macau region include Las Vegas Sands (NYSE:LVS), MGM Resorts International (NYSE:MGM), SJM (HKG:0880), Galaxy (HKG:0027) and Melco Crown.

Our price estimate for Wynn Resorts stock stands at $135, implying a 5-10% discount to market price.

Macau Gaming Industry

In the first quarter of this year, Macau monthly gaming revenues grew by 33%, 48% and 48% respectively. And the second quarter has maintained the pace, with April’s gaming revenues growing 45% over April 2010, to $2.56 billion in gaming revenues. [2] This growth is driven by the increasing number of high net worth individuals (HNIs) in Asia and rapid economic development in the Asian economies.

According to data released by the Gaming Inspection and Coordination Bureau, gross gaming revenues totaled $7.3 billion in the first quarter of this year, representing a year on year rise of about 43%. The two most prominent categories of Macau gaming, VIP baccarat and mass market baccarat, accounted for 90 percent of the total. [3]

Macau Operations

The Macau region contributes approximately 60% to Wynn’s net revenues. VIP gaming constitutes a major chunk of Macau revenues, followed by slot machines and mass market table games.

Relevant Articles
  1. With Macau Business Picking Up Pace, Will Wynn Stock Recover To Pre-Inflation Shock Highs Of $140?
  2. Will Wynn Stock Recover To Pre-Inflation Shock Highs Of $140?
  3. Can Wynn Stock Return To Its Pre-Inflation Shock Highs?
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See our full analysis for Wynn Resorts stock here

Notes:
  1. Macau Gambling Revenue Surges, May 3, 2011 []
  2. Macau Ups The Ante Again, May 6, 2011 []
  3. Macau’s Gaming Revenues, April 19, 2011 []