Embed Size (px)
Citation preview
7/24/2019 LR-WEALTH
http://slidepdf.com/reader/full/lr-wealth 1/3
based on the previous day’s close and translates
WEALTH SECURITIES INC
Equity Research
Gaming
Company Snapshot
Price (P) 9.20Shares O/S (m) 1,200Market Cap (Pm) 11,03952-wk price range (P) 6.50-12.28
12-mo ave T/O (Pm) 14.825
Major Shareholders Alfredo BenitezZoraymee Hldg. Inc.Grand Shares, Inc.
11.2%11.1%10.0%
Free Float 62.6%
Leisure & Resorts WorldCorp (LR)
BUY
Target Price: P15.15
Earnings Update2014 results slightly off but show strong core businesses
2014 net income doubles to P750m. LR reported 2014 net income of P750m,up 132% YoY. Net revenues rose 26% to P3.8b on the back of significant growthfrom its E-bingo games, First Cagayan Leisure and Resort Corp (FCLRC)service and hosting fees, and LR’s share in the rent the City of Dreams Manila property which it started booking this year. However, while operating expensegrowth was slower (+12% YoY) than revenue growth and thereby boosting
margins, overall opex was 13% higher than our estimates. Thus, LR’s reportednet income accounted for just 96% of our full-year forecast.
Core businesses deliver strong performance. FCLRC posted a 57% growth in
revenues owing to the growing number of operational locators (now at 84 vs. 71at the start of the year). As such, FCLRC’s 2014 net income grew 68% to P378mfrom P225m in 2013. Net income from the retail division grew by 93% to P198mon the back of a 30% rise in revenues from its E-bingo business which more thanoffset the 5% decline in its traditional bingo business. Overall net revenues werehigher by 8% than our full-year estimate.
New businesses post profits. Prime Investment Korea Inc, LR’s wholly owned junket operation unit and 51%-owned Hotel Enterprises Philippines, have both
turned around with a P108m net profit in 2014 from a loss of P24m in 2013. ABLeisure Global Inc, LR’s subsidiary entitled to a share in the rent received byBelle Corp (BEL) and the EBITDA of Premium Leisure Corp (PLC, Buy) fromCoD Manila, likewise provided an additional P53m in net income for 2014 vs aP52m loss in 2013. ABLGI’s turnaround is due to the commencement of therental payments by Melco Crown (Phils) Resorts Corp (MCP, Buy) to BEL.
Big jump in margins. Operating expense grew only 12% YoY, thereby making
2014 operating margin stand at 21% from 12% in 2013 as the decrease inpayouts and contracted services costs offset the rise in rental and salaryexpenses. However, opex was still 13% higher than our estimate and thusexplains the slight underperformance of LR’s earnings vs. our full-year estimate.There were dramatic increases in costs for representation and entertainment,
transportation and travel, contracted services and interest charges.
Reiterate BUY with TP of P15.15: In light of the continued strong performanceof its core operating subsidiaries and further momentum that should arise withthe full operations of CoD Manila, we believe, LR should remain on a stronggrowth path. We reiterate our BUY call on LR with a TP of P15.15. This offers a65% potential share price upside and translates to an undemanding valuation of10.6x 2015E income and 7.1x 2016E income.
Financial and Valuation Highlights
in Pm 2012A 2013A 2014A 2015E 2016ENet Revenues 2,809 3,035 3,832 5,122 6,050Operating Income 218 352 819 2,486 3,402
Net Income 279 324 750 1,699 2,541EBITDA 344 476 966 2,458 3,380EV/EBITDA (x) 10 6 9 10 11EPS (P) 0.22 0.27 0.48 1.42 2.12EPS growth (%) - 22.7% 77.8% 195.8% 49.3%P/E (x) 41.8 34.1 19.2 6.5 4.3
Source: Wealth Research estimate, company data
A - Actual results E - Wealth estimates
Analyst : Matthew Sy-Tan
T: 634.5038 local 8168E: [email protected]
Analyst : Jason Lee
T: 634.5038 local 8165E: ason.lee wealthsec.com
Price Performance
1m 6m 12mLR +4.8% -2.7% +17.6%
PSEi +0.1% +11.6% +19.4%
29 Apr 2015
7/24/2019 LR-WEALTH
http://slidepdf.com/reader/full/lr-wealth 2/3
Fig.1 Interim Results
2014A
(Pm)
2013A
(Pm)
YoY
change
(%)
2014E
(Pm)
% of
2014E
Net Revenues 3,832 3,035 26 3,732 103Operating Income 819 352 133 1,061 77
Pre-tax Net Income 1091 504 116 1,166 94
Net Income 934 424 120 974 96
Net Income to commonshareholders (beforepreferred dividends)
750 324 132 802 94
Diluted Earnings/(Loss)Per Share
0.483 0.206 134 0.55 88
Source: Company Data, Wealth Securities Estimates
18 Nov 2014 Leisure & Resorts World Corp
Wealth Securities, Inc. 2
7/24/2019 LR-WEALTH
http://slidepdf.com/reader/full/lr-wealth 3/3
Wealth Research Analysts
Ricardo P. Puig
Research Head
Strategy, Conglomerates, Property,
Tel: (+632) 634-5038 ext 8128
Laura Dy-Liacco
Deputy Head of Research
Utilities, Conglomerates
Tel: (+632) 634-5038 ext 8153
ND Fernandez
Banking
Tel: (+632) 634-5038 ext 8158
Matthew S. Tan
Consumer, Gaming, Services
Tel: (+632) 634-5038 ext 8168
Jason Lee
Construction, Media
Tel: (+632) 634-5038 ext 8165
Rating System
Wealth Securities Research follows the following rating
definition
Buy We expect total return of more than 12% in thenext 12 months
Hold We expect total return of -12% to 12% in the
next 12 months
Sell We expect total return of less than -12% in the
next 12 months
Disclaimer: The in fo rmat ion and op in ions in th is r epor t were p repared by Wea l th Secur i t ies , Inc . The in fo rmat ion he re in i s
be l ieved to be re l iab le and has been ob ta ined f r om pub l ic sources be l ieved to be re l iab le . Wea l th Secur i t ies makes norepresen ta t ion as to the accuracy o r comp le teness o f such in fo rmat ion .
Wea l th Secur i t ies may engage in secur i t ies t r ansac t ions , on a p ropr ie ta r y bas is o r o the rw ise , in a manner incons is ten t w i ththe v iew taken in th is r esearch repor t . In add i t ion , o the rs w i th in Wea l th Secur i t ies , inc lud ing t r aders and sa les s ta f f , maytake a v iew tha t i s incons is ten t w i th tha t taken in th is r esearch repor t .
Op in ions , es t ima tes and p ro jec t ions in th is r epor t cons t i tu te the cu r ren t judgment o f the au thor as o f the da te o f th is r epor t .They do no t necessar i l y r e f lec t the op in ions o f Wea l th Secur i t ies and a re sub jec t to change w i thou t no t ice . Wea l th Secur i t ieshas no ob l iga t ion to upda te , mod i fy o r amend th is repor t o r to o the rw ise no t i fy a rec ip ien t the reo f in the even t tha t any
op in ion , fo recas t o r es t ima te se t fo r th he re in , changes o r subsequen t ly becomes inaccura te . P r ices and ava i lab i l i t y o ff inanc ia l ins t ruments a re sub jec t to change w i thou t no t ice . Th is repor t i s p rov ided fo r in fo rmat iona l pu rposes on ly . I t i s no tan o f fe r o r a so l i c i ta t ion o f an o f fe r to buy o r se l l any f inanc ia l ins t ruments o r to pa r t i c ipa te in any pa r t i cu la r t r ad ings t ra tegy . Ta rge t p r ices a re inheren t ly imprec ise and a p roduc t o f the ana lys t judgment .
A l l r igh ts res erv ed . No p ar t o f t h i s pub l ica t ion may be re p roduced o r dup l ica ted , red i s t r i bu ted o r pos ted on a ny we bs i t e or pa ge , o r fu r th e r red is t r ibu ted t o any t h i rd pa r t y w i t hou t the p r i o r conse n t o f Wea l t h Sec ur i t ies Inc .
Wealth Securities Inc2103 A&B, East Tower, PSE Center
Exchange Road, Ortigas Center
Pasig City 1600
Tel: (+632) 634-5038
Fax: (+632) 634 5043
www.wealthsec.com
