Sanctions against Hong Kong-listed casino group Nagakov led to the suspension of the Russian project, said Terry Ng, an analyst with Daiwa Capital Markets Hong Kong Limited, citing comments from management on Tuesday and referring to financial measures by numerous countries against the Russian Federation.
The note did not specifically mention Russia’s military invasion of Ukraine. However, Daiwa added that Nagakov may now seek to divest from Russian ventures.
“Management has noted that the new sanctions affect Naga’s ability to continue funding projects,” Ng said at a casino complex (pictured) near the Russian Pacific port of Vladivostok.
For Daiwa’s part, sanctions against Russia could affect Nagakov’s “ability to operate efficiently even if future projects are completed” unless they “roll back.”
“We believe Naga [Corp] is most likely to consider selling the project,” the analyst added.
On Mar. 3, Naga Corp. announced that it had suspended construction on the site of the Primorye Integrated Entertainment Zone “until the situation becomes clearer.” It did not mention the Ukraine crisis or international sanctions against Russia at the time.
Nagakov’s core business is a casino monopoly in Phnom Penh, the capital of Cambodia, which operates the Nagaworld complex.
Daiwa said it cut its Nagakov earnings forecast for 2022 by 61.5% to reflect a “slower-than-expected recovery in regional travel” following COVID-19-related restrictions in many tourism source markets.
Daiwa said the suspension of the Russian plan was also a factor in the revaluation.
Nagakov did not mention the opening date of the Primorye resort in its annual results released on Feb. 7, but said it expected to “continue to develop facades, machinery, electrical and plumbing, and construction works this year.”
The brokerage’s valuation of Nagakov’s Russia venture followed the Daiwa Investment Conference-Tokyo 2022 held online on Monday, with Nagakov executives involved. 프라그마틱 슬롯 사이트
Daiwa now expects Nagakov’s 2022 EBITDA to be $274 million, rising to $473 million in 2023 and $605 million in 2024. In 2019, the pre-pandemic trading year, it generated $672 million in EBITDA.
From early March to Sept. 15, 2021, Cambodia’s COVID-19 response measures shut down casino facilities at the Nagaworld complex. It reported a loss of $147 million for all of 2021.
In a note on Tuesday, Daiwa said, “We believe there is little risk of pandemic-induced closures of Nagaworld going forward. We agree with management that a ‘travel bubble’ with its Southeast Asian neighbors will be a major driver of recovery in 2022 as China sticks to its ‘zero-COVID’ policy.”