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Douglas Hoyt

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  • Asia Entertainment & Resources CEO Discusses Q4 2012 Results - Earnings Call Transcript [View article]
    The HK listing and a pick-up in the biz.........which by the sounds of the comments on the CC is in progress.
    Apr 1 08:52 AM | Likes Like |Link to Comment
  • Asia Entertainment & Resources: Short-Term Weakness Offers Long-Term Potential [View article]
    Now I get where you are coming from. But it's because you think you know more than you do. AMAX's financial troubles go back to 2010 when a combination of overly aggressive credit extension during the global recession and the official 1.25% cap on agent commissions caused them to lose many of their key agents and nearly go bankrupt. They have been struggling ever since. Conversely, AERL recently became more conservative with credit extension (your characterization that they cut back massively is a gross over statement) in the wake of China's slowdown but have indicated they may reverse that strategy in response to China making credit more available to stimulate their economy. You may also not be aware that agents typically cover losses from uncollectable credit rather than jeopadize their standing with promoters. Additionally, AERL's potential bad debt collections are backstopped by the founder's loan. While smaller promoters may be having difficulty during the slowdown, that does not include AERL as a top 10 promoter. Please note that since being a public company none of the founder's loan has had to be tapped to cover bad debt. Net income for the first half of the year was around $34M.

    As for the accounting of cash, their refernces to cage capital or chips receivable in their public documents are a matter of semantics. Were they to be liquidated today they have a positive cash balance of approx $150M US, period.

    There are a number of reasons AERL is under valued, but none that you have mentioned.
    Jul 27 11:41 AM | 1 Like Like |Link to Comment
  • Asia Entertainment & Resources: Short-Term Weakness Offers Long-Term Potential [View article]
    Calling someone's motivations in to question is easily done. For example, I might ask why you find the decision to pay a dividend from ample FCF cause for concern? Are you short the stock?

    See how easy that was?

    "Too good to be true," shorts engage in that kind of innuendo all the time. Oooops, sorry, I did it again.

    My understanding of the EDU situation is they are being looked at to see if they are entitled to the profit interests they are claiming to be there's. The VIE structure itself is not a material issue.

    H2 results in Macau could be flat to slightly negative or positive. We'll have to wait and see. Fair value is in the eye of the beholder. You being short ........sorry............ kidding, I know you're not. I'm not sure how you arrived at $4-5. Seems cheap to me considering even without planned expansion 2012 EPS will still likely be over $1.60 and they already have $3.30 a share in cash on the balance sheet.
    Jul 26 09:23 PM | 1 Like Like |Link to Comment
  • Asia Entertainment & Resources: Short-Term Weakness Offers Long-Term Potential [View article]
    If we used your logic cash would be zero as all the cash is used in the cage each month.

    The $0.26 makes up the total dividend for a fiscal year, that is how yield is determined.

    I'm done, good luck.
    Jul 26 04:22 PM | 1 Like Like |Link to Comment
  • Asia Entertainment & Resources: Short-Term Weakness Offers Long-Term Potential [View article]
    I'm not sure what you mean by double dipping. Cage capital is comprised of cash, credit, and the founder's loan. Subtract the latter two and you are left with AERL's cash amounting to roughly $180M.

    The next divi payment is $0.12. After that the final payment for fiscal 2012 will be 15% of net income minus the $0.12 divi coming in Sept.
    Jul 26 09:13 AM | 1 Like Like |Link to Comment
  • Asia Entertainment & Resources: Short-Term Weakness Offers Long-Term Potential [View article]
    There is little point in discussing PT's or a time frame. Analyst's PT's range from $9 to $16 based on conservative valuations (50% discounts on a EBITDA basis) relative to brick and mortar casino companies.
    Jul 25 07:10 PM | 1 Like Like |Link to Comment
  • Asia Entertainment & Resources: Short-Term Weakness Offers Long-Term Potential [View article]
    Take total cage capital (about $300M) subtract LOC's (about $120M) and you get $180M in cash. Subtract total obligations for the King's Gaming acquisition (about $40M) leaves $140M divided by 42.6M shares outstanding equals $3.28. Comments on focusing on Macau for the time being come from the SEC docs and conference calls.

    Assuming NI of say $75M for 2012, 15% is $11.25M, divided by 42.6M shares is $0.26 for a yield of 8.2% at today's close. Not shabby but not 13%.

    Variations in the hold are common but revert to the mean over time. It's the nature of the biz.
    Jul 25 07:05 PM | 1 Like Like |Link to Comment
  • Asia Entertainment & Resources: Short-Term Weakness Offers Long-Term Potential [View article]
    Comprehensive info is available here.

    http://bit.ly/MHovyx
    Jul 25 06:19 PM | 1 Like Like |Link to Comment
  • Asia Entertainment & Resources: Short-Term Weakness Offers Long-Term Potential [View article]
    Mathieu,

    Appreciate the effort but you are factually incorrect on a number of counts. The dividend is tied to NI so the projected yield will be well below 10% (unless NI ramps in the second half) for 2012's results at today's closing price. Roll for a given quarter depends on casino hold, nobody should be intimating that means the casino is cheating. The trial in S. Korea you metioned was done some time ago. Expansion there is not currently being considered. Cash on the balance sheet exceeds $3.20, not $0.38.

    Corrections aside, IMO you are correct to point out the stock is cheap based on traditional valuation metrics, even when applying the "Chinese discount." Multi-party verification (Macau authorities, their casino partners like LVS) of cash on hand and reported revenue has been extensive. Dividend payments (the third one is coming in Sept.) substantiate cash flows. As you point out their VIE structure has been judged to be legally enforeable in Macau. A HK listing is being explored, as is expansion including private tables potentially adding 10-20% to RCT. In other words, despite Macau VIP slowdown there are EPS catalysts in the pipeline.

    Good luck.
    Jul 25 05:56 PM | 2 Likes Like |Link to Comment
  • Asia Entertainment & Resources: Undervalued Stock With The Safety Of A High Yield, Part II [View article]
    reszelak,

    I would not be surprised if there is a presence of organized crime in Macau. What you have to understand though is there are tiers in terms of the casinos and the junkets who operate in them. The 5 star casinos have a higher degree of scrutiny by internal security as well as more oversight regarding the transactions between patrons and the house. And in order to protect their licenses they will only do business with the highly capitalized, professionally run junkets.
    Oct 30 01:42 PM | Likes Like |Link to Comment
  • Asia Entertainment & Resources: Undervalued Stock With The Safety Of A High Yield [View article]
    SK,

    Actually they do hold licenses as gaming promoter companies with the Macau authorities. Read David Bain's comments about this in the report available at AERL's site. These licenses may be severely restricted going forward increasing the barrier for entry and making AERL's license a more valuable commodity.
    Oct 17 03:31 PM | Likes Like |Link to Comment
  • Asia Entertainment & Resources: Undervalued Stock With The Safety Of A High Yield [View article]
    chop,

    This year's net income will be over $80M.

    http://bit.ly/oClyhT

    You guys are wearing me out. Doesn't anyone know how to do DD?
    Oct 17 03:27 PM | Likes Like |Link to Comment
  • Asia Entertainment & Resources: Undervalued Stock With The Safety Of A High Yield [View article]
    Nostores,

    Go to the Oct. 3 investment forum and listen to the LVS presentation by their executives. Then you'll understand better what is going on.

    http://bit.ly/qh5NFC
    Oct 17 02:52 PM | Likes Like |Link to Comment
  • Asia Entertainment & Resources: Undervalued Stock With The Safety Of A High Yield [View article]
    The "massive" number of earnout shares to be issued over the next two years equates to 5 million shares. If you thought of it in terms of a stock issuance that was done to facilitate the kind of net income increase AERL will experience over the next two years investors would flock to by that issuance. You're barking up the wrong tree.
    Oct 16 12:10 PM | Likes Like |Link to Comment
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