外文报告：Deutsche Bank-Melco Crown：Potential to raise stake in Studio City-120927

Deutsche Bank
Markets Research
Rating
Buy
Asia
Hong Kong
Consumer
Hotels / Leisure /
Gaming
Company
Melco Crown

Date
27 September 2012
Company Update
Potential to raise stake in Studio City

Reuters Bloomberg Exchange Ticker
MPEL.OQ MPEL US NMS MPEL
Forecasts And Ratios
Year End Dec 31
2010A 2011A 2012E 2013E 2014E
Sales (USDm)
2,641.9 3,830.9 4,062.0 4,687.5 5,399.0
EBITDA (USDm)
430.4 809.6 883.1 982.0 1,109.8
Reported EPS FD(USD)
-0.02 0.55 0.72 0.90 1.16
DB EPS FD(USD)
-0.01 0.61 0.72 0.90 1.16
DB EPS growth (%)
97.9 – 17.8 25.2 28.9
PER (x)
– 16.6 17.8 14.2 11.0
EV/EBITDA (x)
8.7 8.4 9.1 7.9 6.6
Yield (net) (%)
0.0 0.0 0.0 0.0 0.0
Source: Deutsche Bank estimates, company data
1
DB EPS is fully diluted and excludes non-recurring items
2
Multiples and yields calculations use average historical prices for past years and spot prices for current and future years, except P/B which uses
the year end close

Govt confirmed that Studio City will have a casino

________________________________________________________________________________________________________________
Deutsche Bank AG/Hong Kong
All prices are those current at the end of the previous trading session unless otherwise indicated. Prices are sourced
from local exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject
companies. Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus,
investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.
Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND
ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MICA(P) 072/04/2012.

Price at 25 Sep 2012 (USD) 12.79
Price target - 12mth (USD) 17.40
52-week range (USD) 16.00 - 7.38
HANG SENG INDEX 20,528

Karen Tang
Research Analyst
(+852) 2203 6141
karen.tang@http://wendang.chazidian.com


Price/price relative
0
4
8
12
16
20
9/10 3/11 9/11 3/12
Melco Crown
HANG SENG INDEX (Rebased)
Performance (%) 1m 3m 12m
Absolute 7.5 12.8 25.5
HANG SENG INDEX 4.1 9.5 17.1

MPEL has announced an increase in its equity capital commitment to its 60%-
owned Studio City project of US$350m, to a total of US$830m. If its partner
chooses not to raise its contribution within six months, MPEL's stake will rise
to 67%. Last week, the govt confirmed that Studio City was one of the five
pipeline projects in Macau that will receive table quota. These developments
reduce risks for the project, in our view. Reiterate Buy as MPEL's focus on
premium mass should allow it to outgrow peers in 2013. Trading at 8x 2013E
EV/EBITDA (14x PE), the stock looks to be pricing in a free option for two
growth opportunities (Cotai & Philippines).
Solid balance sheet allows participation in growth opportunities
Outstanding capex for the Studio City project remains at US$1.9bn. Additional
funding is likely to come from bank loans and other debt financing, which we
expect to be completed by year end. As MPEL’s operating cashflow is over
US$700m per year, we think the company can comfortably fund this
incremental commitment and its investment in the Philippines.
More clarity on table allocation from the govt
Last week, Francis Tam, Secretary for Economy in Macau, said that after
Sands Cotai Central receives its additional 200 table quota in 2013, the table
cap policy will allow only 2,000 more tables over the next 10 years. The govt
has identified five pipeline projects in Cotai (Galaxy Macau Phase 2, Studio
City, Wynn, SJM and MGM) which should each have around 400 tables. The
exact table allocation will depend on the amount of non-gaming facilities.
Reiterate Buy on strong premium mass penetration
MPEL’s City of Dreams has overtaken Wynn Macau as the new leader in mass
table yield in Q2. We think it has more room to improv e as our table count
exercise in Sept reveals that City of Dreams has further raised its % of mass
market table in the premium segment during Q3. Our SOTP target price is
based on 9x 2013E EV/EBITDA plus Cotai. Key risk is VIP slowdown in Macau.