Falling industry demand is likely to drag down earnings for SJM, Stanley Ho’s casino operating company in Macau, by 17 percent during 2009, says a research report from Karen Tang, a research analyst at Deutsche Bank in Hong Kong.
The figure is exactly in line with the 17 percent Macau-wide fall in casino revenues forecast by Goldman Sachs in a recent research paper.
“Despite management’s efforts towards cost rationalisation, we forecast net profit to drop 17 percent in 2009 before recovering in 2010, when Oceanus is scheduled to open,” says DB’s Ms Tang.
The report adds that while the near-term outlook is subdued, a prospective 7.2 percent dividend yield should provide support to the share price.
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