Day 5 Macau – China Trade Mission

Macau – Day 5 China Trade Mission

“The customer in Las Vegas comes into the casino to be entertained… The Chinese customer walks into the casino to face destiny. They are here to do battle – and strike it rich.” – local Macau casino manager, on the Chinese love of gambling.

Today is our last full day in Macau. Today, our China trade mission will meet with Macau real estate experts to show the China trade delegation the thriving and growing city of Macau. This will be followed by a city tour to give our group of investors first-hand knowledge of the continue growth of the Chinese economy. The evening will be topped off by a traditional Portugese dinner.

Macau has become the Asian Las Vegas. Gambling revenues are the driving force behind the Macau economy. The new Macau is an extraordinary opportunity for investors. Macau’s economy jumpted 20.1% in the 4th quarter of 2006, topping the 3rd quarter’s growth rate of 18.8%. Growth rates in the double digits have been common place for the last five years. And the growth will continue…

PricewaterhouseCoopers recently predicted that Macau’s casino-gambling revenues would increase at 16% a year, reaching $12 billion in 2010.

It is illegal to gamble in China… except in Macau.

Thanks to gambling, tiny Macau has grown so fast that it actually overtook Las Vegas in 2006 to become the world’s biggest gambling destination. Yes, more money is gambled in Macau than anywhere in the world, including Las Vegas.

• Sands Macau’s owner, Las Vegas Sands, has seen stock more than triple since its December 2004 IPO.
• Wynn Macau’s owner, Wynn Resorts, has seen its stock shoot up 7X’s since 2002.
• Melco International, controlled by gambling mogul Stanley Ho, has gone up 18X since December 2003.
• Hong Kong-listed Shun Tak Holdings, a Macau-focused conglomerate, has more than quadrupled since Dec 2003.

So why is Macau so much better than Vegas?

The Chinese people love to gamble. And those streaming to Macau bet big $$$$… much more than Americans. They prefer table games like baccarat to the cheaper slot machines popular in Vegas. As I looked for the right way to play what’s going on in Macau, I found the opportunity couldn’t be more obvious. It’s Macau real estate. People are pouring in. But there is no land. (If Macau were shaped like a square, it’d be 3 miles long by 3 miles wide.) The government estimates as many as 100,000 new construction jobs are under way in Macau. In the next year, 17,000 foreign workers are expected to move to the tiny city because of the gaming industry.

Tomorrow, we head to Mainland China. Our first stop will be the exciting and growing city of Shenzhen.

Don’t forget, you can follow me on Twitter for up to the minute update of the
China Stock Market and the 2008 China Investors Field Trip.

Coming to you live from Macau on the 2008 China Investors Field Trip.

See you tomorrow,

Jim Trippon, CPA
Editor-In-Chief
China Stock Digest

P.S. Don’t forget about the special offer going on while I am in China. Order between now and October 24th, and receive $100 off the regular subscription price.