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Galaxy may recoup investment within 6 years
Galaxy Entertainment Group Ltd, the casino operation that has quadrupled in value over the past year, said it may recoup its HKD 15.5 billion (USD 2 billion) investment in Galaxy Macau within six years.
The company expects annual returns of 14 to 19 percent at Galaxy Macau, a 450 table resort aimed at middle-class Chinese gamblers, Chief Financial Officer Robert Drake said in an interview with Bloomberg yesterday.
Hong Kong-based Galaxy has benefited from Macau’s growing casino revenue, which rose 43 percent to MOP 103.3 billion (USD 12.9 billion) in the first five months of this year, according to data from the Gaming Inspection and Coordination Bureau.
“We’re very pleased with the performance so far,” Drake said. “If the market continues on its current trajectory, then we’ll probably announce plans sooner rather than later.”
Galaxy Macau opened May 15 after an almost two-year delay caused by the global credit crisis. Galaxy’s billionaire chairman, Lui Che-woo, estimated last year that the resort cost HKD 14.9 billion.
“Galaxy Macau, being the only new casino product this year being offered by any of the casino operators, will allow Galaxy to win market share against its competitors,” George Choi, a Hong Kong-based analyst at Citigroup Global Markets Asia, said in a telephone interview.
Galaxy’s stock climbed 2.5 percent to HKS 15.40 at the 4 pm close of trading in Hong Kong. The stock, which is up 75 percent this year, rose 5 percent two days ago after Galaxy said in a statement that Permira Advisers LLP has no plans to sell its USD 1.7 billion stake in the company.
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