Wynn Macau suffers 12.1% slip in VIP turnover

Victim of an intensified competition.

According to Maybank Kim Eng, Wynn Macau (WM) reported a 12.1% YoY drop in VIP turnover and 13.2% in slot handle in 3Q12, hit by intensifying competition in Cotai and an industry-wide slowdown in the VIP segment.

Here's more from Maybank Kim Eng:

We forecast revenue and EBITDA growth to lag the industry and forecast market share to slide by 1ppt in 2013 and 2014 from 12% in 2012F.

We expect Wynn Cotai to be completed in 1H16, after Galaxy Entertainment and Melco Crown wrap up their expansion in Cotai. But the influx of supply by competing operators in 2017 does not bode well for late entrants seeking to ramp up their projects in a crowded market.

The high budget set may also result in lower dividends going forward.

WM’s fundamentals and valuation point to risks on the downside. The stock trades at rich valuations of 17.0x FY13F PER and 13.3x FY13F EV/EBITDA vis-à-vis players similarly focused on the VIP segment.