Date
23 September 2017
Lui Che-woo has seen his wealth shrink due to a slide in the share price of his flagship firm Galaxy Entertainment. Photo: HKEJ
Lui Che-woo has seen his wealth shrink due to a slide in the share price of his flagship firm Galaxy Entertainment. Photo: HKEJ

Casino mogul Lui Che-wee slips 10 places in regional rich list

Casino mogul Lui Che-woo has slipped 10 places in a Bloomberg ranking of the Asia-Pacific rich list following a slide in Macau gaming stocks.

Lui, the chairman of Galaxy Entertainment Group (00027.HK), was once seen as posing a threat to Cheung Kong Holdings (00001.HK) chairman Li Ka-shing’s position as the region’s richest man.

The gaming tycoon’s wealth had soared to US$23.6 billion in January when Galaxy shares were traded at around HK$80, putting him in the No. 2 spot on the regional rich list. But now the shares are at just around HK$50. 

As of noon Wednesday, Lui’s fortune had fallen to US$15.9 billion, putting him in the 12th spot in the region in the Bloomberg Billionaires Index, mainly because of the continuing weak performance of Galaxy.

The 85-year-old tycoon owns about 40 percent stake in the company directly. Galaxy shares have slumped about 40 percent from their January peak of HK$83.20. They closed morning trading Wednesday at HK$49.45, falling for the eighth straight session.

In fact, all the six Macau casino stocks have suffered steep losses compared with their peaks in the first quarter, a stark contrast to their robust showing last year.

Macau has seen its gross gaming revenue drop for three straight months. It fell 6.1 percent to 28.87 billion patacas (US$3.61 billion) in August from a year earlier, after falling 3.6 percent in July and 3.7 percent in June.

Morgan Stanley said casino stocks are yet to reach the bottom. China’s ongoing anti-graft campaign and depressed property sector in the mainland will mean more headwinds for the gaming industry, the brokerage said, according to the Hong Kong Economic Journal.

A slowdown in revenue growth in the VIP segment will be more obvious for casino operators. Revenue may bottom out early next year, but there won’t be a significant improvement if labor costs rise further amid escalating industrial actions by casino workers, Morgan Stanley was quoted as saying.

Michael Ting, a gaming stock analyst with CIMB Securities, was even more pessimistic about the casino stocks.

The analyst believes Macau’s gross gaming revenue will continue to record negative growth every month for the rest of the year, and that it may only reverse in the second quarter 2015.

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JH/JP/RC

EJ Insight reporter

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