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Public company info - MGM China Holdings Limited , 02282.HK

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MGM China Holdings Limited, 02282.HK - Company Profile
Chairman James Joseph Murren
Share Issued (share) 3,801,000,000
Par Currency Hong Kong Dollar
Par Value 1.0
Industry Gamble
Corporate Profile Business Summary: The principal activity of the Company is the development and operation of casino games of chance and other casino games and the related hotel and resort facilities in Macau. Performance for the year: Total operating revenue of HK$15,356.0 million for the year ended December 31, 2017 was 3.0% higher than the prior year. Business Review: MGM MACAU opened in December 2007 and has a casino floor area of approximately 32,134 square meters, with 1,019 slot machines, 427 gaming tables and multiple VIP and private gaming areas. The hotel comprises a 35-storey tower with 582 deluxe rooms, 468 standard guest rooms, 99 luxury suites and 15 private luxury villas. In addition, the resort offers luxurious amenities, including 8 diverse restaurants and bars, retail outlets, world-class pool and spa facilities, and approximately 1,600 square meters of convertible convention space. The resort’s focal point is the signature Grande Praça and features Portuguese-inspired architecture, dramatic landscapes and a glass ceiling rising 25 meters above the floor of the resort. The group's property is directly connected to the One Central complex, which features many of the world’s leading luxury retailers and includes Mandarin Oriental Hotel and serviced apartments. The Group has continuously been focusing on profitability, lowering the operating cost base, and actively managing the gaming floor and room yields. The group is selectively allocating capital expenditure to enhance and refine MGM MACAU and progress the development of the group's new MGM COTAI property. The group's revenue and adjusted EBITDA increased by 3.0% and 2.1% to HK$15,356.0 million and HK$4,587.4 million respectively for the year ended December 31, 2017 over the prior year. For the year ended December 31, 2017, the group's operating profit decreased by 15.3% to HK$2,624.2 million primarily due to acceleration of pre-opening costs amounting to HK$459.1 million for the preparation of MGM COTAI that opened on February 13, 2018. Profit attributable to owners of the Company decreased by 23.6% to HK$2,320.2 million also due to the recognition of a deferred tax liability of HK$317.1 million pertaining to the distributable proft of MGM Grand Paradise during the year. The Macau and China governments implemented numerous policy changes starting in the middle of 2014 which led to a decline in the gross gaming revenues in the Macau market. The group is encouraged that total gross gaming revenue has grown since August 2016 through December 2017. The group believe that the recovery has been driven by new gaming and non-gaming offerings in the Macau market. At the same time, there is an ongoing market share migration from the Macau Peninsula to Cotai as more resorts were opened in the Cotai area in recent years. In view of that, the group expect that the group's expansion into Cotai in 2018 will benefit the group's overall gaming market share, especially with the group's exciting and diversifed entertainment offerings. MGM COTAI opened on February 13, 2018 with an expected total development cost of approximately HK$27 billion, excluding land costs and capitalized interest. Conveniently located with various access points from other hotels and public areas, MGM COTAI offers gaming area and approximately 1,400 hotel rooms and suites, meeting space, retail, food and beverage and other non-gaming offerings, as well as the Mansion for the ultimate luxury experience. MGM COTAI will also offer Asia’s first dynamic theater and a spectacle that will introduce more advanced and innovative forms of entertainment to Macau. On January 25, 2018, the Group received notification from the Gaming Inspection and Coordination Bureau of Macau (“DICJ”) of the approval of 100 new gaming tables and 982 slot machines for operation at MGM COTAI in January 2018, and 25 new gaming tables for operation effective on January 1, 2019 for a total of 125 new gaming tables at MGM COTAI in aggregate. In addition, DICJ also approved the initial transfer of 77 gaming tables from MGM MACAU to MGM COTAI. Under the land concession of MGM COTAI, the Group was required to complete the development by January 2018, however, the development period of this land concession has been extended for 3 months to April 2018 by the Macau Government, without payment of any fnes, due to the delays caused by Typhoon Hato that struck Macau in 2017. Macau’s Gaming and Tourism Markets A number of factors have adversely impacted the Macau gaming market commencing from the second half of 2014 as a result of China and Macau Government policies that began to take effect including: — The introduction of smoking restrictions on mass gaming floors implemented in October 2014; — Extension of smoking restriction from mass gaming floors to VIP areas effective on January 1, 2018 which requires smoking lounges to be set up in all VIP areas and the existing smoking lounges in the mass gaming floors to be upgraded to comply with the enhanced technical standards within a one-year transition period after the effective date; — Certain political initiatives introduced by the China and Macau Government, including an anti-corruption campaign, currency transfer restrictions and a new border currency declaration system. This particularly affected the number of high-end or premium players visiting the Group’s VIP, main floor and slot machine gaming operations; and — Tightened regulations on financial accounting, anti-money laundering reporting and accounting records required to be maintained for gaming promoters (started in the fourth quarter of 2015) and a ban on mobile telephone usage at VIP gaming tables from May 2016. These changes particularly impacted the Group’s VIP gaming performance. Total gross gaming revenue in the Macau market decreased by 9.1% to HK$140.2 billion for the eight months ended August 31, 2016 over the comparable period in 2015. Since that time, total gross gaming revenue has stabilized with growth occurring in consecutive months from August 2016 through December 2017 which mainly is attributable to opening of several new large-scale integrated resorts in Cotai during that period. Total gross gaming revenue increased by 19.1% to HK$258.0 billion for the year end December 31, 2017 over the prior year. Prospects: The group's competitive strengths lie in offerings of high-quality gaming, hospitality and entertainment experiences in the group's integrated destination resorts; segment and targeted marketing to various customer groups through the group's Mlife customer relationship program; strong analytical capability and effective execution of the group's strategies by the group's operations team. The group continue to execute the group's strategies on improving customer experience, employee engagement and operational efficiency. The group is refurbishing key gaming areas in MGM MACAU to improve traffic flow and to capture more high-end mass business. The group continue to improve operating efficiencies to further enhance the group's first-class property which embodies luxury, intimacy and inspiration while introducing new innovative gaming products to enhance the group's customer experience. The group is working on technologies to enhance the group's analytical capability for operations and marketing to enable the group to deliver focused personalized marketing programs. The group continue to review the group's business relationship with each of the group's gaming promoters and identify potential gaming promoters to grow the group's VIP business. The group manage the group's gaming mix by continuously evaluating table yield, focusing on measuring the number of table open hours in relation to business volume. The group is always evaluating the table limits and constantly reviewing the possible reallocation of tables to maximize the group's table utilization and proftability. Beyond gaming, the group continue to improve the group's customer experiences by adding and enhancing the group's non-gaming offerings. The group is adding retail offerings and refurbishing the group's restaurants to maintain the group's competitiveness in the Macau market. The group continue to organize and sponsor exhibits and events in the group's Grande Praça and Art Space. With almost twice the square footage of MGM MACAU, the scale of the group's new MGM COTAI property will allow the group to capitalize on the group's international expertise in providing exciting and diversified entertainment offerings. The group's MGM COTAI theater is a transformable space, the frst of its kind in Asia and the only one in the world of this scale, offering a wide range of entertainment options to draw visitors from around the world. The group's Spectacle, situated at the heart of MGM COTAI, is enriched with incredible experiential technology elements to entertain the group's guests. The group will continue to deliver exciting and memorable events to the group's properties in support of the Macau Government’s vision for diversifcation. The group continue to provide professional and service training to the group's employees with the goal of building a culture of executional excellence.

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