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2017 Inside Asian Gaming Power 50: Number Seven - Alvin Chau

Tuesday, 05 December 2017 13:52
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7 Alvin Chau

Suncity Group



• Heads Macau’s top junket promoter
• Upped stake in Vietnam IR and won casino consulting contracts there
• Selected assets injected into Hong Kong listed company renamed Suncity Group

Macau’s high roller rebound returns Suncity Group Chairman Alvin Chau to the Top 10 of the Asian Gaming Power 50. Suncity leads the junket sector by a wide margin and the gap is growing along with VIP revenue, a cool MOP$67 billion (US$8.38 billion) in the third quarter, up 35% year-on-year according to Macau government statistics. Gaming regulator DICJ reports VIP rose to 57% of gross gaming revenue in the quarter and 54% for the first nine months of 2017. Suncity accounts for 50% to 60% of Macau junket revenue, according to industry observers.

Suncity has pioneered expanding services to VIPs beyond gaming and travel. Its portfolio includes wealth management, property, auctions – and it can even help manage your racing stable. If that was Suncity’s full story, it would be incredible enough, but there’s much more afoot.

In June, Suncity agreed to acquire 34% of the Hoi An South IR project in central Vietnam’s Quang Nam province for HK$600 million (U$77 million). Dubbed Hoiana, the development consortium includes Chow Tai Fook Enterprises – the late Cheng Yu-tung’s family vehicle that once tried to take a majority stake in Suncity – and local investor VinaCapital.

As with all new Vietnam IR projects, Hoiana needs to invest US$2 billion – reduced from US$4 billion by the government’s long anticipated gaming decree issued last January – and it can apply for permission to allow Vietnamese nationals to play there. The full IR plan comprises seven phases, aiming to develop nearly 1,000 hectares at a cost of US$4 billion.

The project’s US$650 million first phase is scheduled to open in the second quarter of 2019 on 270 hectares, according to Union Gaming, with 140 gaming tables and 1,000 electronic gaming seats. Accommodations will include a 445-room hotel and 200 “buy to let” condos, plus a golf course, watersports center and live entertainment venue, Hoiana announced last month. Union Gaming expects condo sales will recoup much of the capital expenditure, “making the return hurdle significantly lower than the cost of US$650 million would imply.”

Suncity has secured a separate “casino services” contract with the Hoi An project and is providing “technical services” to the Van Don IR project, slated to open March 2019 at the north end of Halong Bay and rumored as likely to be granted permission for local players, a privilege also reportedly given to an IR under development on Phu Quoc island off southwest Vietnam. Suncity hopes to provide services to more projects in Vietnam and beyond.

The Vietnam projects have been folded into Hong Kong listed Suncity Group Holdings. That company was formerly known as Sun Century Group and retains a portfolio of properties in southern China. Under both names, Mr Chau has been the Chairman. He also chaired Hong Kong listed Grand Peace Holdings, specializing in finance and funerals in southern China, until selling out and stepping down in June.

The listed portion of Suncity also includes the group’s travel business but, so far, none of its Macau junket business assets. Watch for possible shifts on that front.

To return to the full list of 2017 Asian Gaming Power 50 winners, click here.

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