2. Melco Crown Entertainment
One of the 6 key players
in Macau
Currently commands
11% market share
Transformational
progress, in line with
booming gaming
industry
Strong growth catalysts
in the pipeline
25%
18%
18%
11%
9%
7%
12%
Market Share
SJM Holdings
Las Vegas Sands
Galaxy Entertainment
Melco Crown
Wynn Resorts
MGM China
Others
3. Macau’s Gaming Industry
Recorded US$45b in gaming revenue for 2013
Outstrips Nevada’s gaming revenue of US$11.14b
for 2013
Poised to further increase from spending of middle
class Chinese
Industry poised for further growth in gaming
revenue
4. Melco’s Turning Point
Opened Integrated Resort
(City of Dreams) in Cotai
(2009)
City of Dreams became the
growth story that Melco was
looking for to ride the gaming
industry growth
Superior vessel in attracting
the mass market gaming
segment
5. Why Melco Crown Entertainment?
Superior growth metrics seen across profitability metrics
Consistently growth in FCF despite heavy capex, endorsing quality earnings
Consistently higher growth recorded over the past 5 years
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
-1000000
0
1000000
2000000
3000000
4000000
5000000
6000000
FY09 FY10 FY11 FY12 FY13
Growth In Profitability Metrics
Revenue Net Profit ROE (RHS) ROA (RHS)
6. Melco’s Bigger City Of Dreams
Opening of Studio City
come 2015
What Studio City is
about
How it will translate to
further growth in
revenue
Higher penetration of
mass market segment,
and eventual market
share
FY13 Total Revenue
City Of Dreams Mocha Clubs Altria Macau Studio City
7. Organizational Overview
Sound management tenet
in place
Seasoned and armed with
a wealth of gaming
experience
Share based
compensation in line with
stewardship of Melco’s
growth direction
Lawrence Ho
Co-Chairman,
Executive
Director
John
Wang
(NED)
Clarence
Chung
(NED)
William
Nisbet
(NED)
Rowen
Craigie
(NED)
Douglas Packer,
Co-Chairman, non
executive director
8. Valuation
Current Enterprise Value
-US$18.4b
Adjusted Bk Value
-US$5.43b
Asset Reproduction Value
-US$7.22b
Excess of Enterprise Value
compared to reproduction and
book value (Half the stock is
made up of growth
expectations)
0
1000000
2000000
3000000
4000000
5000000
6000000
7000000
8000000
Comparison of values ($000)
Asset Reproduction Value Vs
Adjusted Book Value
Adjusted Bk Value Asset Reproduction Value
9. Conclusion
Key growth drivers are performing well
Growth from profitability metrics are soaring, and should push higher come
2015 (Studio City)
Valuation metrics from reproduction value and adjusted book value
suggests huge growth expected from market participants
Current forward PE of 14.55x looks relatively cheap for growth potential
priced in
City of Dreams Manila also in the pipeline to be up within the next 2 years
Legalizing Casino bill in Japan could allow Melco to have a new foot in a
potentially huge gaming market
