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Suncity’s Hoiana positioned to achieve 70% of NagaCorp’s EBITDA once fully ramped: analyst

Independent research firm Smartkarma has described the long-term prospects of Suncity’s Vietnam integrated resort project, Hoiana, as largely positive with the property estimated to generate annual EBITDA of US$470 million once fully ramped – roughly 70% of NagaCorp’s hugely successful Cambodian IR NagaWorld.

In a note examining Suncity’s growing portfolio of gaming operations in Asia, Smartkarma analyst Michael Ting outlined a solid business case for Hoiana, located near Hoi An on the Vietnamese east coast, which he expects to post gross gaming revenue of US$2.35 billion per year based on the performance of a VIP room Suncity already operates at Crowne Plaza in Da Nang.

“We estimate that Suncity generated roughly US$1.4 million GGR per table, per month at Crowne Plaza,” Ting said.

“Extrapolating this to the 140 tables at Hoiana Phase 1, we estimate that the property can generate roughly US$196 million of GGR per month or US$2.35 billion per year.

“Applying a 20% EBITDA margin (double that of Macau), we estimate that Hoiana Phase 1 at full ramp can achieve EBITDA of US$470 million per year which is at 70% of NagaCorp Ltd.”

Ting warned that Hoiana was unlikely to significantly contribute to Suncity Group’s bottom line until 2022 due to the impact of COVID-19 on global travel, but added, “We are positive on Hoiana on a longer-term basis.”

A joint venture between Sanctity, Hong Kong’s VMS Investment Group and local firm VinaCapital, Hoiana held a soft opening in late June with Suncity later revealing that Hoiana Casino recorded a US$1.5 million loss on play during its three days of operation for the quarter but had since “recorded positive gross gaming revenue in both July and August.”

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