We recently met with Dynam Japan mgmt and Mr. Tsukasa Akimoto, a pro-gaming Diet member. Discussion on gaming legalization is expected to start during mid-July to end-August.
The current Diet session has been extended to Sep 27, and the hope to pass the bill is high as long as the discussion is raised.
Dynam is one of the Hong Kong-listed beneficiaries from theimproving visibility in gaming legalization, trading at 13.3x FY15 P/E.
Gaming is not a priority but has higher chance this year
The security bill is the priority, which is the major reason for the decisionon Jun 22 to extend the current Diet session for 95 days to Sep 27.However, Mr. Tsukasa Akimoto, a Diet member in Japan from Liberal Democratic Party (pro-gaming), highlighted the gaming bill is unlikely to be impacted by the security bill: the gaming bill was submitted through the cabinet committee, different from the security committee which discusses the security bill. After two bills are discussed in cabinet committee in the coming days, the gaming bill will be raised during midJuly to end-August.
Plan on resort construction begins to crystallize
Dynam’s long term plan appears more positive: the company plans to build a resort in Yamaguchi Prefecture, no matter the gaming bill can pass or not. With a construction budget of JPY15-20bn, Dynam will work with Japan Tourism Bureau (JTB) to promote the place to bring moretourists and the detailed construction plan will solidify in a year. We believe it is a good step for Dynam to diversify its business towards inbound tourism.
Valuation
Among the HK-listcos, we reiterate our view that Dynam is the major beneficiary of potential unlocking of Japan gaming market: Niraku (1245 HK, Non-rated), another HK-listed Japanese pachinko operator, has not spoken publicly about its interest in gaming. Dynam is now trading at 13.3x P/E with 6.9% yield for FY15 (Mar-YE), vs. Niraku’s 7.6x P/E for FY15 (Mar-YE)
We recently met with Dynam Japan mgmt and Mr. Tsukasa Akimoto, a pro-gaming diet member. Discussion on gaming legalization is starting to start mid-July to end-August.
The current diet session has been extended to Sep 27, and the hope to pass the bill is high as long as the discussion is raised.
Dynam is one of the Hong Kong benefits from The Visibility in Gaming Legalization, trading at 13.3x FY15 P/E.
Gaming is not a priority but has a higher chance this year
The security bill is the priority, which is the major reason for the decisionon Jun 22 to extend the current diet session for 95 days to Sep 27. However, Mr. Tsukasa Akimoto, A Diet member in Japan from Liberal Democratic Party (pro-gaming), the gaming bill is going to be impacted by the security bill: the gaming bill was going through the cabinet committee, Different from the Security Committee which defers the security bill. After Two Bills Are Drained in Cabinet Committee in the Coming Days, The Gaming Bill Will Be Raised During MidJuly to End-August.
Plan on Resort Construction Planning to Crystallize
Dynama's long term plan takes more positives: the company plans to build a resort in Yamaguchi Attraction, no matter the gaming bill can pass or not. With a Construction Budget of JPY15-20BN, Dynam Will Work with Japan Tourism Bureau (JTB) to Promote the Place to Bring Moretouristy and the Detailed Construction Plan Will Solidify in A year. We BELIEVE IT IS A GOOD STEP FOR DYNAM TO TOURISM ITS BUSINESS INBOUND TOURISM.
Among the HK-ListCos, We Reiterate Our View That Dynam is the Major Benefit of Potential Unlocking of Japan Gaming Market: Niraku (1245 HK, Non-rated), Another HK-listed Japanese Pachinko operator, has not taken advantage about its interest in gaming. Dynam is now trading at 13.3x P/E with 6.9% yield for FY15 (Mar-ye), vs. Niraku's 7.6x P/E for FY15 (Mar-ye)
