Macau Legend Climbs on Debut After IPO Size Halved
Macau Legend Development Ltd. (1680), the casino firm backed by former Macau lawmaker David Chow, climbed 2.1 percent on the first day of trading, after the company halved its share sale size to raise HK$2.19 billion ($282 million) amid turbulent market conditions.
The casino operator closed at HK$2.4. The benchmark Hang Seng Index gained 1.9 percent.
Macau Legend in June said it would offer 934.8 million shares in the IPO, lower than the 2.05 billion it had earlier planned to sell. It priced at HK$2.35 apiece, near the low end of a range of HK$2.30 to HK$2.98 per share.
“I think the company did a good job in terms of pricing it at a more attractive level,” Michael Ting, an analyst at CIMB Securities, said via phone today. “Whether this price level can sustain is probably too early to tell right now.”
Macau Legend, which operates casino venues under SJM Holdings Ltd. (880), cut the size of its IPO after Asian markets dropped amid concerns that a cash crunch in China could slow economic growth there. Hong Kong’s benchmark Hang Seng index has lost about 7 percent in June.
Key assets of the company include the Landmark Macau hotel, the Pharaoh’s Palace casino and the Macau Fisherman’s Wharf complex. Macau Legend doesn’t have a casino license of its own.
Mainland Chinese tourists have helped turn Macau into the world’s largest gambling hub, with $38 billion in casino revenue last year, more than six times the Las Vegas Strip.
“Based on our conversation with gaming operators, people still remain quite optimistic about future growth of gaming revenue in Macau,” Ting said.
Dynam Japan Holdings Co. Ltd., (6889) a pachinko halls operator in Japan, has subscribed to $35 million worth of shares in the IPO as a cornerstone investor.
SJM is one of six operators in Macau that have government permission to run their own casinos. It operates some casinos in partnership with companies that don’t have their own license. Chow served as a legislator in Macau from 2005 to 2009.
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