The worst of fundamentals is over, and the COVID-19 vaccine industry is expected to resume. Affected by the COVID-19 epidemic, the total gaming revenue of Jin Jie Holdings from January to September 2020 was US $609 million, a decline of 52.6% compared with the 1.287 billion in 2019, which was much less than-82.5% in Macao as a whole, because the gold industry enjoyed strong domestic demand in Cambodia. Macao relies on mainland tourists and individual travel policies. In the long run, Southeast Asia is a very attractive emerging economy. The gaming industry in Southeast Asia is a reflection of its economic growth and will continue to flourish after the epidemic. The introduction and gradual popularization of COVID-19 vaccine has also reduced the risk of another boom in the industry, and the haze shrouded in the industry will eventually dissipate.
Start the equity incentive plan to stimulate the vitality of internal management. The company recently announced the equity incentive plan, which plans to grant up to 220 million shares (5% of the total share capital) to motivate employees. Chairman TimothyMcNally, CEO Zeng Liqiang, Executive Vice President Li Weide and other six board members all received shares. in addition, 1100 qualified employees of the company received no more than 5500 million shares, most of which were granted over six years. The landing of the equity incentive scheme is expected to further mobilize the enthusiasm of the management.
Major shareholders are full of confidence in the future of the company and increase their holdings. After increasing his holdings in the first quarter of last year, Dr. Zeng Liqiang, the founder and major shareholder of the company, carried out a new round of increase in the company's shares from September 11 to December 31 last year, increasing his holdings 55 times, equivalent to 28.7 million shares, equivalent to HK $272 million, with a comprehensive purchase cost of HK $9.47. reflects that major shareholders are optimistic about the future prospects of Golden World Holdings.
A new project at Angkor Wat opens a Tale of two cities in Siem Reap in Phnom Penh. In addition to announcing an investment of US $3.5 billion in 2019 to develop new casinos in Phase III of the Golden World, the company recently proposed to build a new world-class non-gambling resort and theme park on 500m of land near Angkor Wat, opening up room for business expansion and revenue growth in the gold world.
We also believe that the new project will help the company to further attract customers, enrich the customer source structure, form cross-selling, and increase the revenue of Phnom Penh gaming business.
Investment suggestion: we adjust the model according to the company's revenue recovery, and predict that the company's income from 2020 to 2022 will be 8.9 MPA 1.83 billion respectively, with a year-on-year change of-49.5%, 70.3% and 21%, respectively. The homing net profit was US $0.98 million, respectively, with a year-on-year change of-81.2%, 251.1% and 39.2%, respectively. Based on the relative size of the gold industry in the Hong Kong stock gaming sector and the valuation of the market environment in Cambodia, the target EV/EBITDA was valued at 14 times, resulting in a target price of HK $13.10 and maintaining the "buy" rating.
Risk tips: the impact of the global epidemic on the tourism and gambling industry, the increased risk of competition among large casinos in Southeast Asia, the risk of postponement of the third phase of the gold project, and the risk that the time and income of the Russian project are not up to expectations.