Goldman Sachs published a report to maintain the purchase rating of Kaisheng Holdings (00102.HK) and lowered the target price from 6.9 yuan to 6.4 yuan.

Goldman Sachs pointed out that the first phase of Kaisheng Holdings' integrated resort project “Tigre de Cristal Crystal Tiger Palace” in Russia opened on November 11. The number of daily visitors increased from 600 to over 1,000, and attracted more than expected Chinese visitors, accounting for about 50%, followed by local guests from South Korea and Russia. Benefiting from low local gaming taxes (only 1% to 2%) and cheap labor, the profit before tax, interest, depreciation, and amortization (EBITDA) of the first month of the project's opening exceeded its operating costs of $3-4 million.

The bank believes that with the continuous improvement of local flight, infrastructure, and visa relaxation measures, it will help attract more visitors, and is confident in Kaisheng's strategy for Chinese VIPs. The bank believes that the company is flexible in changing the combination of tables and slots to help it adapt to changes in the real needs of the market.

However, due to the decline in the company's VIP lounge consumption, the bank lowered Kaisheng's profit forecast for 2016 to 2017 by about 32% to 40%. However, the bank believes the company can capture potential demand in North Asia. It expects a compound annual increase of 38% in earnings from 2016 to 2020, while Crystal Tiger Palace's return on capital in 2016 is expected to be 47%.