GM - Sydney, Australia

Melco PBL Entertainment: The Crown of Macau

The stock has this week broken through its 13 day moving average. I bought some on the downward slope around $10 not expecting them to go much further to around 6 bucks last week. Was an exceptional buying opportunity last week at around 6 so as a value investor I took advantage of the opportunity last week when people were dumping the stock for lack of understanding of the impact on MPEL of the new visa restrictions. The reports are that the Macau casinos can't cope with the numbers going through the places (MPEL recently converted slot areas to tables to try to cater for the extra punters coming through its doors) and the visa restrictions are more likely to get the gamblers punting full on whilst they are there in Macau on their limited visas. The new visa restrictions are not going to solve the problem with an appreciating Yuan and prosperity in China. Furthermore the junket operators such as A-Max will most likely "facilitate" visas for the high roller players that the Macau Crown has as a portion of its clientelle. I am veryu much looking forward to the June quarter results next month (probably mid August if the timing of release of the March quarter is anything to go by) to see if there is any upward movement on the rolling chip turnover of around US19.5 billion (that's an amazing turnover!!!!)...and further upside when the second phase of the project opens in the first half of 2009....
This stock in my view has huge upside potential.... Chinese and gambling.... the company has the right ingredients to make money!

I am now set for the long term in MPEL (having exited my US casino stocks mid 2007) and am really looking forward to the ride up on this one.

Sooner or later investors will finally understand that this is a diamond worth taking a position on.