Archive for the ‘ Business News ’ Category

Companies go slow on M&As abroad: survey

Chinese companies are increasingly interested in forming joint ventures in their overseas expansion drive, given the mounting protectionism witnessed in more markets over the world, instead of making outright buyout of companies abroad, said Clifford Chance, an international law firm that provides legal advice on M&A activities.

The overseas merger and acquisition (M&A) activities are becoming even more challenging these days as companies have indicated that regulatory hurdles topped the charts preventing them from making outright acquisition of assets in foreign countries directly, according to an Economist Intelligence Unit survey carried out on behalf of Clifford Chance released on Tuesday.

About 37 percent of respondents said this year that they would consider joint venture or partnership in an overseas investment, compared with the 32 percent who planned to opt for the traditional M&A, said the report. Compared with a similar survey conducted by the UK-headquartered law firm in 2010, the results showed that 34 percent of respondents were interested in forming joint ventures in their overseas expansion versus the 39 percent who preferred M&A.

“The tendency for Chinese companies becomes more obvious in their overseas investment in recent years, said Roger Denny, a Hong Kong-based partner from the law firm.

In the report released two years ago, 47 percent of the Chinese companies surveyed said they would prefer to proceed with joint ventures or alliances, in comparison with the 27 percent who said they would prefer outright acquisitions. However, Clifford Chance didnt provide the latest data for comparison. Denny said the alliance-type approach had definitely become more popular with Chinese companies.

Chinese companies were traditionally cautious with direct buyout as they had less experience in overseas investment. They are afraid to fall victim and would be discriminated in another jurisdiction when they formed a joint-venture or alliance that would effectively help them acclimatize with the local experience of their counterpart.

Despite Chinese companies making an increased number of cross-border acquisitions over the years, they are facing an escalating harsher regulatory environment abroad as major economies have been steadily increasing their controls over M&A transactions in almost all the sectors.

The overseas buying sprees of Chinese companies have also raised concerns abroad. Some of them are having trouble in obtaining approvals from local authorities for various reasons. They include Huawei Technologies Co Ltd, the Chinese telecommunications equipment supplier which had failed in repeated attempts to secure deals in North America amid suspicions over the companys background.

Chinas four biggest State-owned banks are very cautious with overseas expansions these days, and they will only consider strong and reliable opportunities abroad given the high regulatory barriers, said Martin Rogers, another Hong Kong-based partner of Clifford Chance.

However, an increasing preference over the formation of joint ventures does not mean the momentum of M&A carried out by Chinese companies abroad will retreat, Denny added.

According to a PricewaterhouseCoopers report released in January, the M&A deals climate on the mainland proved its resilience despite the challenging global economic times, with the mainland outbound M&A deals climbing to a new record of 207 in 2011, up 10 percent year-on-year, while the $42.9 billion value of the deals, represented a 12 percent increase from 2010 levels.

http://www.chinadailyapac.com/article/companies-go-slow-mas-abroad-survey

Hysan Place’s prime retail space almost fully leased

Hysan Development Ltd, the biggest commercial landlord in Causeway Bay, said its new commercial project, Hysan Place, in the traditional shopping district on Hong Kong Island has been 95 percent leased out ahead of its August scheduled opening.

Average retail rents in the 36-storey shopping and office mixed complex was about HK$150 per square foot, Lau Siu-chuen, the newly appointed chief executive officer of the group said in a media briefing on Monday. The near-full domination of shops compared with 40 percent occupation of office spaces in Hysan Place at the moment, according to Lau.

Located in the prime Causeway Bay one of the most favorable shopping destinations of visitors in Hong Kong, Hysan Place will become one of the most high-end commercial buildings in the area.

John Siu, executive director of Cushman & Wakefield (Hong Kong) told China Daily that the high retail occupancy rate of Hysan Place is well expected as it is now a time when big brands also have to queue up for a good location in Hong Kong, not to mention in Causeway Bay.

But the average retail rent of HK$150 per square foot sounds a bit less expensive. Rents vary in the same shopping plaza, while I heard some brands pay over HK$1,000 per square foot for a place in adjacent buildings, said Siu.

The retail sector remained the most active property sector in the first quarter of 2012, with the robust sales figures contributing to activity in the leasing and sales markets, and retailers continuing to search for spaces, according to Jones Lang LaSalles report released in late April.

Despite rising rents, both international and local retailers didnt halt their aggressive expansion to secure retail premises in prime locations for higher market exposure. Persistent leasing demand drove up rents by 4.5 percent for both prime street shops and premium centers, while capital values for prime street shops also rose a further 9.7 percent in the first two months of 2012, said the report.

International retailers are somewhat less keen on the Western markets given their sluggish economic recovery, but are showing strong interest in the Asian markets, said a report by Colliers International dated May 11.

The continual expansion of overseas brands in Hong Kong has translated into a robust demand for retail premises in the core shopping districts of Central, Causeway Bay, Mongkok and Tsim Sha Tsui.

Siu from Cushman & Wakefield said the skyrocketing retail rents may not necessarily cover the sales in stores, but many international brands continue competing to seize prime locations to advertize themselves, particularly in places where mainland tourists go to.

Brands with exposure on the mainland are trying to squeeze into a place on Canton Road in Tsim Sha Tsui, (because) they believe (that) tourists from the mainland will naturally equate them to a well-known brand, which, on the other hand, will also boost their recognition and sales on the mainland, Siu added.

While all these property advisors hold the view that Hong Kongs retail property sector is an exception with an upward outlook amidst the global economic uncertainties, Colliers last week warned that the citys surging shop rents are spelling doom on its long-term competitiveness as some retailers have shifted their interests from Hong Kong to other locations, including the mainland and Singapore, where shop premises are bigger while retail rents are lower.

http://www.chinadailyapac.com/article/hysan-places-prime-retail-space-almost-fully-leased

City’s growth slowest since Q4 2009

Hong Kongs economy slowed further in the first quarter of this year, with the real GDP posting a slight growth of 0.4 percent the slowest pace since the global financial crisis as exports slipped amid a difficult external environment, the government said on Friday.

Total exports of goods dipped by 5.7 percent in real terms in the first quarter of 2012 over a year earlier, down significantly from the 3 percent expansion in the fourth quarter of last year, dragging the whole economy to record the slowest quarterly year-on-year growth since the fourth quarter of 2009 when the economy expanded 2.5 percent. This was despite the domestic sector including private consumption continuing to display strength, according to the government.

The 0.4 percent GDP expansion was also lower than the 1.1 percent median forecast in a Bloomberg News poll of 16 economists.

The slight year-on-year expansion has been viewed against the relatively high base of comparison in the first quarter of 2011 when the GDP increased by 7.6 percent, according to the government. On a seasonally adjusted quarter-to-quarter comparison, real GDP also expanded a tepid 0.4 percent in the first quarter of 2012.

The lowest point in Hong Kongs 2012 growth trajectory is likely playing out right now, but real momentum will unlikely be regained until the second half of 2012, Donna Kwok, Greater China economist from HSBC, commented on the figures released on Friday.

The government economist Helen Chan said slower global economic growth is expected this year given that the EU economy is already in recession. She pins her hopes on a brighter economic outlook in the second half given the better-than-expected US economic performance and firm mainland economy.

Local consumption demand will stay buoyant backed by the favorable income and employment conditions, and the citys economy is poised to gradually regain momentum in the coming quarters, particularly in view of improved export orders and vibrant inbound tourism.

Chan warned the local investors to stay cautious as the financial and the property markets are believed to be volatile for the rest of the year.

Hong Kongs property market has revived since February, with overall residential prices posting a 5 percent quarter-on-quarter gain during the first three months and the number of transactions surging 36 percent from the preceding quarter.

It is an unhealthy situation, Chan said in a press conference. We are very concerned with the property sector, and we will initiate further government measures to prevent the housing bubble if necessary, she said.

Hong Kong governments economic forecasts for 2012 as a whole kept unchanged. It maintained its forecast that GDP would grow 1 percent to 3 percent this year, down from 2011s 5 percent, and expects inflation to average at 3.5 percent this year, lower than the 5.3 percent increase last year.

As inflation is clearly cooling down and domestic demand is still holding up, HSBCs Kwok said the bank remained comfortable with its forecast of 3.3 percent GDP growth this year.

A Hang Seng Bank report published on Wednesday said it maintains the 3 percent GDP growth forecast for 2012 as a whole.

http://www.chinadailyapac.com/article/citys-growth-slowest-q4-2009

City’s outlook ahead gloomy: economists

Economists are generally bearish about the performance of the Hong Kong economy both in the first and second quarters, following a big GDP growth decline in the first quarter.

The Bank of East Asia estimates a tepid 0.8 percent GDP growth in the first three months of 2012 over the same period last year, after the 1.5 percent contraction in export recorded during the quarter.

The gloomy export, which weighs over 20 percent in the citys total economy, dragged the overall performance, said Paul Tang, chief economist from the bank.

Exports fell 6.8 percent in March after growing 1.5 percent in the first two months, due to the subdued external demand by the external economic uncertainties.

Hang Seng Bank similarly forecasted a GDP growth of a mere 1.4 percent a sharp deceleration from the 3 percent expansion recorded in the final quarter of 2011, the bank said in a report titled Anemic growth in the first quarter.

If the forecast is near the mark, the GDP data will become the worst number since the third quarter of 2009 when Hong Kong was in recession, Hang Seng Bank economists Ryan Lam and Joanne Yim wrote in a report.

Against this scenario, the banks pointed out that retail sale is one of the sectors in Hong Kong that is spurring growth, even though it is now growing at a much slower pace compared with previous years.

In the first three months of this year, Hong Kongs total retail sales value rose 15.9 percent, but it has slowed compared with the 23.3 percent growth in the fourth quarter of 2011 and the 24.8 percent growth throughout last year.

The short term outlook remains difficult. Growth will continue to be held back by household deleveraging in the advanced economies, repercussions from the Eurozones sovereign debt crisis and cautious business investment spending, according to Hang Seng Bank, which added that consumer spending will be underpinned by a healthy labor market and tourist inflows.

Hang Seng Bank said growth may have bottomed in the first quarter but the ensuing recovery will not be swift. Whilst exporters continue to face external headwinds, the retail sector has shown signs that economic activity may have bottomed.

Bank of East Asias Tang, nevertheless, draws a more pessimistic picture for the current quarter. Economic figures for the second quarter should get even uglier given the worsening external merchandizing performances, Tang told China Daily during a telephone interview. The GDP growth in the second quarter could record a null.

In early April, the University of Hong Kong economists forecasted that the citys economic growth will accelerate to 3.1 percent in the second quarter from 2.3 percent in the first quarter, supported by a rebound in external demand.

The Hong Kong government is due to release the economic data of the first quarter today.

http://www.chinadailyapac.com/article/citys-outlook-ahead-gloomy-economists

Tougher laws proposed for IPOs

Hong Kongs securities regulator on Wednesday launched a public consultation paper, proposing to impose both civil and criminal liabilities on IPOs sponsors if they provide false information in prospectuses to investors in the city.

Sponsors of stock listings could face the same civil and criminal liability as company directors if a listing prospectus is found to have misled investors, the Securities and Futures Commission (SFC) said in the proposal, which means sponsors will be fined up to HK$700,000 and jailed for as long as three years once convicted.

The head of the market watchdog also consolidated codes of conduct for sponsors in the paper, requiring them to only submit an IPO application when the vast majority of it is completed for due diligence, and to publish the prospectus first draft on the website of the citys stock exchange to encourage quality first draft and (to) make vetting more efficient at a very early stage.

Public investors rely on sponsors to act as key gatekeepers of market quality, and the proposal is intended to enhance investors confidence in the quality of disclosure and the market as a whole, Ashley Alder, chief executive of the SFC said during a media briefing on Wednesday.

In Hong Kong, IPOs sponsors are usually investment banks or corporate finance houses, which are responsible for preparing a companys listing documents and performing due diligence to ensure that they comply with the citys listing rules.

The kickoff of introducing new sponsor regulations comes after rows over the quality revelation of some listed companies in the city. The SFC last month revoked the corporate finance license of Mega Capital (Asia) Co for the listing of Hontex International Holdings Co in 2009, and imposed a fine of HK$42 million upon it, after the regulators probe uncovered materially false information in the prospectus.

Last year, the SFC inspected a total of 17 IPO underwriters and uncovered various problems, including unsatisfactory due diligence and inadequate internal systems and controls over the sponsors work, according to the Wall Street Journal.

These sponsors, who currently meet the required standards, will be little affected by these proposals, said the SFC, which added that many prospectuses submitted to the SFC are poorly prepared with incomplete application drafts, or they are lengthy and full of legalistic descriptions, which are barely readable by common investors in the market.

And big names behave as badly as small ones, said Charles Grieve, senior director of Corporate Finance from SFC, on Wednesday.

It is the second attempt in a decade by the SFC to introduce legal liability for IPO sponsors. In 2005, the watchdog had proposed similar rules, but they were aborted after bankers strongly objected to them.

Alder on Wednesday said this time the new proposal had received mixed to active responses from the banks that the SFC had been in touch with. Alder, nevertheless, said he is unable to provide a timeline when the new plan will be enforced as it is still at an early stage.

The public consultation will go on for two months to conclude in early July.

http://www.chinadailyapac.com/article/tougher-laws-proposed-ipos

Retail space bidding war forces rentals up

Although Hong Kongs retail property sector is an exception with an upward outlook amidst the global economic uncertainties, the citys surging shop rents and acute demand-supply imbalance, nevertheless, is spelling doom on its long-term competitiveness, a report by property agency Colliers International said on Tuesday.

According to Colliers Retail Market Research and Forecast Report, Hong Kongs retail rents are projected to further increase by 12 percent in the following 12 months, after the average ground-floor retail property rent has increased 5.3 percent in the first quarter of 2012 from the previous year in these key shopping districts including Central, Causeway Bay, Tsim Sha Tsui and Mong Kok.

Shop rents at individual prime street segments currently range from HK$1,100 to over HK$1,200 per square foot a month, which is more than 300 percent over 10 years ago, said Simon Lo, executive director of Colliers Asia team said on Tuesday. But the sharp rise of shop rents in these key shopping districts is not representative of the entire picture of the overall retail market in Hong Kong.

According to Lo, the total retail sales value has increased by over 130 percent between 2002 and 2012.

However, retail sales of supermarkets, which are basically visited by local consumers, has grown by only 90 percent during the period while sales of luxury goods including jewelry, watches and valuable gifts have almost quadrupled over the decade, driven by the influx of visitors, particularly those from the mainland since the implementation of the Individual Visit Scheme (IVS) in 2003.

International retailers of jewelry, watches and fashion labels are willing to pay exorbitant rents to secure limited prime retail properties, which is a major reason why premium rents in prime retail districts are able to sustain till today, Lo added.

Overseas retailers remained active in looking for business opportunities in Hong Kong despite the prevailing uncertainties in the global economy. At the same time, established brands showed no signs of slowing down and, with limited availability in the prime most locations, competition for space has now moved to some fringe locations, another real estate service provider Jones Lang LaSalle said in a report dated April 30.

Despite international brands having positive interest in penetrating or expanding into the Hong Kong market, prime ground-floor retail units are extremely limited in supply with popular shopping malls recording 100 percent occupancy at the moment, resulting in aggressive bidding wars for retail spaces pushing up rentals, said Helen Mak, director of retail services at Colliers International.

After hitting multiple dead ends, some retailers started to lose patience when they realized their plans could not materialize after waiting for one to two years, said Mak, who added that some individual retailers who had originally planned to establish their first base in Hong Kong, have aborted the idea and opened their first flagship store on the mainland.

The citys narrow streets at prime locations have also hindered its sheen to a number of international brands, as they could not produce enough spaces to meet the demands of these tenants.

Coupled with the highest prime retail rents in the region, some retailers may shift their interests from Hong Kong to other locations, such as the mainland and Singapore, where their shop size and location requirements are met much easier and at lower rents, said Mak.

http://www.cdeclips.com/en/hongkong/Retail_space_bidding_war_forces_rentals_up/fullstory_73464.html

Mainland and HK markets still rosy for rental and capital value gains: RICS survey

Despite global economic uncertainties continuing to stymie investors appetite for commercial properties in most parts of the world, the mainland and Hong Kong markets remain rosy on rising expectation for rental and capital value gains, according to a survey by the Royal Institution of Chartered Surveyors (RICS).

The commercial property market on the mainland has maintained strong momentum into the New Year with demand continuing to outstrip supply in spite of government cooling measures introduced throughout the whole of last year, according to the quarterly survey released by RICS Global Property on Thursday, which is based on responses from a combination of senior management of large occupiers, service providers in particular RICS members as well as property professionals in different regions.

The recent cooling down in the property and construction market on the mainland is perceived as a healthy adjustment to the economy as a whole, said Kenneth Kwan, chairman of RICS Hong Kong, who believes that the temporary market adjustment is to make the growth more sustainable in the long run.

The rising demand in the first three months in a market where available spaces are basically unchanged has fed the much higher rental expectation for the next quarter after strong growth was recorded last year.

The survey also noted that investment enquiries were unchanged from last quarter while capital values are expected to rise further in the second quarter this year. Compared with the robust demand on the mainland, the report finds that the local commercial property market was less buoyant, with respondents reporting a modest growth in occupier demand alongside similar gains in rental expectations.

A number of the major traditional international occupiers have moved away from the prime Central area due to surging costs, while many top companies are still reluctant to relocate outside the area because of prestige perceptions, the reduction in connectivity and staff services, said the report.

It contrasts to an earlier report prepared by Cushman & Wakefield in mid-April, in which the property consultant forecasted that office rentals in Hong Kong would extend their slide in the second quarter of 2012 after falling 5.2 percent in the first three months as demand shrinks sharply in the prime business district amid lukewarm market sentiment and a consolidation in the financial sector.

However, the RICS survey believes that rental will rise in the second quarter this year, citing the picking up investment enquiries these days after stabilizing from the previous quarter.

The report, nevertheless, pointed out that the prevailing international profile of Hong Kong as a core location for corporate occupiers is increasingly under threat due to direct competition from alternative cities, including Singapore.

One of the primary challenges facing city leaders in Hong Kong is how to increase the attractiveness of office locations outside of the central business distinct to both corporate occupiers and their staff. If undertaken successfully this would mean businesses could afford to keep back office staff in Hong Kong and provide alternative to relocating to cheaper cities overseas, said the report.

http://www.chinadailyapac.com/article/mainland-and-hk-markets-still-rosy-rental-and-capital-value-gains-rics-survey

Wynn gets nod to build new casino

Wynn Macau Ltd, one of the six casino operators in Macao, has received formal approval from the government to begin construction on a new casino resort project, which is expected to boost competition in the worlds largest gambling destination.

The Macao government has granted a land concession on a 21-hectare site at Cotai strip to a subsidiary of Wynn Resorts Ltd, according to a press release posted on its website. The Hong Kong-listed casino operator suspended trading on the exchange on Wednesday.

The groundbreaking on the new site paved the way for the company to add hotel rooms and gaming tables in Macao, where Wynn Resorts gets 72 percent of its revenue, according to Bloomberg data.

A Deutsche Bank note released on Wednesday expected the projects construction to take three years, which, also expected Melco Crown Entertainment Ltd and SJM Holdings Ltd, another two casino operators in Macao, to receive approval for projects on the Cotai strip in the next three to six months.

On April 26, Galaxy Entertainment Group Ltd announced it would invest HK$16 billion in the second phase of its latest resort project by doubling the current space to add as many as 500 gaming tables and two luxury hotels. The Asian arm of Las Vegas Sands Corp in mid-April also opened the Cotai Central resort in Macao, which offers the market a 300,000-square-foot casino and 5,800 hotel rooms.

Casino operators in Macao are competing in business expansion in a bid to seize a bigger market share in the city, Linus Yip, an analyst from First Shanghai Securities told China Daily in a telephone interview.These developments are still in line with the increasing demand since the market now grows by around 20 percent year-on-year, which remains (at) a relatively fast pace, said Yip.

Gambling revenue in Macao surged 21.9 percent to 25 billion patacas ($3.13 billion) in April, the Gaming Inspection and Coordination Bureau said on Wednesday.

The city last year netted $34 billion income from casinos, almost six times the $6.07 billion of the Las Vegas Strip, according to government figures. In the first quarter of this year, the revenue has risen by 27 percent compared with the same period in 2011.

A JP Morgan report released in late April expected Macaos gaming sector to re-rate again in the first quarter when a gradually improving mainland economy stimulates the revenue growth again.

We expect gaming revenue to grow 24 percent (up from 22 percent) and 18 percent in 2012 and 2013, respectively, Kenneth Fong from the bank wrote in the report, which estimated the mass segment to grow at 37 percent and VIP to grow at 19 percent in 2012.

http://www.chinadailyapac.com/article/wynn-gets-nod-build-new-casino

City’s private housing rises

Hong Kong had the highest number of private residences under construction at the end of the first quarter, 4,000 more units compared with the previous quarter, representing the highest number ever in almost eight years (30 quarters), since the fourth quarter of 2004, according to a research report.

The report, compiled by realtor Centaline Property Agency Ltd, shows that the citys total new private home supply will reach 64,000 units in the next three or four years, with new home completion to achieve the governments 20,000 annual target after 2016.

Since the government resumed land sales in 2010, the low private home supply situation has been reversed in the city, said Wong Leung-sing, Centalines director of research.

The number of unconstructed homes on approved land banks has risen above 13,000 in the past consecutive quarters, reaching 15,000 in the first quarter of 2012, said Wong, who added that the total home completion figures are expected to be 10,577 and 15,844 throughout 2012 and 2013, respectively.

The relatively fast new home supply has also been absorbed quickly in the market. Over 85 percent of the new homes completed in 2011 have been sold out, while 40 percent of total new residential apartments are expected to be completed within the year although some deals have also been sealed in the first quarter of 2012, said the report.

The number of new homes completed in a year always differs from the actual transaction data recorded in the same year as the total figures could also include apartment sales that were concluded a year earlier during presales, Midland Realty Chief Analyst Buggle Lau said, adding that the number of residential units that developers decide to launch make the real impact on the market.

The developers are likely to launch as many as 15,000 to 16,000 new homes in the market this year, a notable increase from the 9,000 units last year, said Lau.

In October 2010, Chief Executive Donald Tsang had announced that the government targeted an annual supply of 20,000 apartments through maintaining a relatively fast pace of increasing land supply to stabilize the citys home prices.

During the budget speech on Feb 1 this year, Financial Secretary John Tsang, without imposing any further curbs, announced that government will provide residential sites good for 30,000 private homes in the new fiscal year over the 20,000 units estimated for the current fiscal year, in a bid to maintain a healthy property market.

Hong Kongs home prices have surged too much during the past few years. While the government lacks effective administrative tools to curb the price hike, the plan of boosting land supply is unlikely to see any changes in the following years, a senior economist from Royal Institution of Chartered Surveyors (RICS) told China Daily. He declined to be named.

http://www.chinadailyapac.com/article/citys-private-housing-rises

Galaxy to invest HK$16b in resort project for marketshare

Galaxy Entertainment Group Ltd, one of the key players in Macaos casino market, plans to invest HK$16 billion in the second phase of its latest resort project amid persistent optimism towards the outlook for the worlds largest gambling market.

The second phase of the companys Galaxy Macau resort, which will double the current space to 1 million square meters, is expected to add as many as 500 gaming tables and two luxury hotels, the Hong Kong-listed group said in the city on Thursday, adding that the new phase is scheduled for opening in 2015.

The projected date will possibly make it the next casino to open in the worlds largest gambling destination ahead of its rivals, including Wynn Macau and MGM China, which are still awaiting government approval for their developments.

Deputy Group Chairman Francis Lui said Galaxy does not intend to issue equity as the new project will be funded by its HK$7.7 billion existing cash as well as cash from operations and debt.

The casino operator in early April posted HK$3 billion net income gain in 2011, which is more than triple the income over a year earlier as the newly opened Galaxy Macau resort in the year boosted revenue. But the market was let down as the group didnt payout any dividend.

According to the Macao Gaming Inspection and Coordination Bureau, the citys gaming revenue rose by 27 percent in the first quarter compared with the same period in 2011, at a faster-than-expected growth pace, said Lui, who added that the non-gaming business these days was also growing at double-digit pace within the group, particularly its retail, exhibition and dining fueled by mainland visitors.

Lui Che-woo, chairman of the group added that he believes the tourist inflows will grow even more rapidly in the following years along with the completion of a series of infrastructure developments, including the high speed railway network, the new ferry terminal in Taipa, as well as the Hong Kong-Zhuhai-Macao bridge.

The new announcement came after the Asian arm of Las Vegas Sands Corp opened the Cotai Central resort in Macao two weeks ago, offering the market a 300,000-square-foot casino and 5,800 hotel rooms.

Although the market believes Galaxys mass performance will be the most affected by Sands new casino opening, a JP Morgan report released this week said these concerns are overdone as it sees room for (an) upside surprise if Galaxy can maintain and grow its mass market share.

Besides industry growth, we believe Galaxy offers the most room for share price outperformance through multiple expansion and marginal expansion via operating leverage and efficiency improvements, said the report.

Share of Galaxy rose HK$0.85 or 3.71 percent to close at HK$23.75 on its Hong Kong trading on Thursday, compared with the 0.79 percent gain of the citys benchmark Hang Seng Index.

http://www.chinadailyapac.com/article/galaxy-invest-hk16b-resort-project-marketshare