NagaCorp has been the best performer among the Hong Kong gambling stocks — and among the best performers even if you expand that to include other exchanges.
Of course, the stock has done horribly this year — but not as horribly as most other gambling companies. And yesterday brought some reassuring comments from management as well as a potentially lucrative new partnership with a US gambling firm. Along with a 20% jump in the share price this morning.
NagaCorp operates NagaWorld, which is a Las Vegas-style (though much smaller and less glitzy) casino in Phnom Penh, Cambodia. It is also one of the only publicly traded Cambodian stocks, the shares are traded in Hong Kong and the company is controlled by majority shareholder Chen Lip-keong, a Malaysian tycoon.
I sold about half of my NagaCorp holdings when the world economy started to come apart at the seams, but I remain invested in the firm and am willing to hold my current position for quite some time. Today’s news was promising for two reasons.
First, NagaCorp is in talks to cooperate with Harrah’s — specifically, with Caesar’s — on marketing to Asian high rollers, who are the most valuable gamblers in the world. Here’s an excerpt from the South China Morning Post article:
“Cambodian casino operator NagaCorp and Las Vegas’ Caesars Palace, owned by Harrah’s Entertainment, are in talks to cross-market their properties to Asian high rollers.
“‘We lack an understanding of how to cultivate an Asian customer base and hope we can learn more from NagaCorp,’ Paul Baker, the managing director of international resort marketing for Caesars Palace, said in the Cambodian capital Phnom Penh at the weekend.
“In addition to cross-marketing, Nagaworld chief executive Chen Lip-keong said a partnership could also focus on management systems and co-organising events.
“Harrah’s, the world’s largest casino firm by revenue, has struggled to establish a gaming presence in Asia while rivals including Las Vegas Sands Corp, Wynn Resorts and MGM Mirage are investing billions in casino resorts in Macau and Singapore.”
Harrah’s has been a trailblazing casino company when it comes to tracking gamblers, running efficient casino systems, and marketing effectively to gamblers of every stripe, so this kind of relationship can’t help but be a benefit to NagaWorld, which is still a very small fish.
And second, Chen ...