Inside Asian Gaming

January 2014 | INSIDE ASIAN GAMING 23 In Focus On the former, the WSJ quoted the Hong Kong Securities and Futures Regulator’s 16th October, 2013 opinion that investors should “exercise extreme caution when dealing in the shares” given the ownership of most shares by a small group. On the latter, the WSJ noted IEC would likely fund the deal partly through issuance of securities to Suncity, given that it held only HK$1.36 billion in bank balances and cash on hand, according to its 30th September filing. This could enable Suncity to effectively control IEC through a reverse takeover and in turn to gain a backdoor listing in Hong Kong. Mr Govertsen also noted the backdoor listing angle, while flagging the possibility of an exit for Suncity founder Alvin Chau while multiples were at historical highs. Key Players The Cheng family, headed by Cheng Yu Tung, controls ChowTai Fook Enterprises Ltd, which is active in several sectors, notably as the major shareholder of property developer New World Development Cheng Yu Tung “It is unclear which of Suncity Group’s assets are under the control of Suncity International Holdings Ltd., the entity in which International Entertainment said it might invest,” the WSJ pointed out. Co Ltd. Mr Cheng himself has also owned 10% of Stanley Ho’s STDM since 1982, so is no stranger to Macau gaming. As the press was quick to note, the deal would see Mr Cheng and Mr Ho, who are longtime friends, more closely involved financially as well as raising the level of ownership concentration in the industry. Suncity, headed by Alvin Chau, is the largest of the roughly 200 junket operators in Macau. The company began with a VIP club at StarWorld in 2007 and, as of September 2013, had parlayed this into 17 VIP clubs with 285 tables and an average monthly rolling chip volume of around HK$135 billion. Much of this has been driven by the vigor of Mr Chau, whose aggressive growth orientation is matched with prudence in extending credit, enabling the company to avoid the liquidity problems encountered by some of its competitors. The company has been an innovator in its field, one example being its Suncity card, a loyalty card that earns customers points redeemable on retail, dining and entertainment purchases around Macau as well as giving them access to their gaming records and the spending and credit amounts to which they are entitled at gaming venues. Suncity is also a leader in pursuing opportunities outside gaming, its interests stretching to finance, real estate, entertainment, natural resources, food and beverage, tourism, media and luxury products and services. Suncity, headed by Alvin Chau, is the largest of the roughly 200 junket operators in Macau. The company began with a VIP club at StarWorld in 2007 and, as of September 2013, had parlayed this into 17 VIP clubs with 285 tables and an average monthly rolling chip volume of around HK$135 billion.