(Corrects story published on Jan. 26 to show venture is between Lawrence Ho and James Packer.)
Jan. 26 (Bloomberg) -- Melco Crown Entertainment Ltd. rose to the highest level in almost three months in U.S. trading after gambling stock analysts Union Gaming Group LLC said revenue at Macau casinos may exceed a record this month.
American depositary receipts of Melco Crown, a casino venture between billionaires Lawrence Ho and James Packer, jumped 6.8 percent to $12.06 by 12:17 p.m. in New York, after earlier climbing as much as 7.9 percent to $12.18, the highest intraday level since Oct. 28. The ADRs are trading at a 5.8 percent premium over its Hong Kong stock, the widest since Melco Crown shares started trading in the city on Dec. 8.
Analyst Grant Govertsen at Union Gaming, based in Las Vegas and Macau, said yesterday that revenue in the only Chinese city where public gambling is allowed may break the October record of 26.9 billion patacas ($3.4 billion) this month. Melco Crown has approached banks to help finance its Studio City project in Macau, the world’s biggest gambling hub, four people familiar with the matter said last week.
Table occupancy in Macau’s casinos has been “very high” since the Chinese Lunar New Year holiday started on Jan. 23 and visits are expected to continue to grow through to the end of this week, when the break ends, Govertsen wrote in a research report.
David Bain, an analyst at Sterne Agee & Leach Inc. in Woodland Hills, California, reiterated his “buy” recommendation on Melco Crown today, setting a 12-month price target of $21.50. The company is valued at about eight times its earnings before interest, tax, depreciation and amortization, compared with 11.9 times for Wynn Resorts Ltd.’s China unit and 12.5 for the Macau subsidiary of Las Vegas Sands Corp., Bain wrote in the report.
Melco Crown’s shares gained 2.6 percent today in Hong Kong to HK$29.35, the equivalent of $3.78 per share, as the city’s stock market opened after the three-day New Year break.
--Editors: Emma O’Brien, Marie-France Han
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