Suncity’s Hoiana will contribute to profits from 2022

Analysts say the casino will give Suncity a better EBITDA margin than Macau.
Analysts say the casino will give Suncity a better EBITDA margin than Macau.

According to research, the casino project in Vietnam will eventually generate EBITDA of US$470 million per year.

Hong Kong.- Suncity Group Holdings’ Hoiana casino project in Vietnam will not “significantly” contribute to company profits “until financial year 2022”. So says former banking analyst Michael Ting.

A preview of Hoiana was first offered on June 28. Phase one has a capital expenditure budget of US$1 billion, over 1,000 hotel rooms, 140 gaming tables (two-thirds VIP, one-third mass-market) and 330 slots.

Ting said Hoiana offered a better EBITDA margin on gaming than Macau, where Suncity has its core operations, and that the difference in tax outlay could help Hoiana’s prospects.

However he mentined that the “current macro[economic] uncertainty involving Covid-19, along with only an expected gradual resumption of international travel” would mean it could be slow to get off the ground.

Based on GGR of around US$1.4 million per table per month at Crowne Plaza, in Da Nang, Ting said the 140 tables at Hoiana phase one “can generate roughly US$196 million of GGR per month, or US$2.35 billion per year”.

Mr Ting stated: “Applying a 20-per cent EBITDA margin – double that of Macau – we estimate that Hoiana phase one at full ramp, can achieve EBITDA of US$470 million per year, which is 70 per cent of NagaCorp Ltd’s financial year 2019 EBITDA”.

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