Hong Kong-listed International Entertainment Group's annual report shows that its New Coast Hotel in Manila has seen a significant increase in gaming revenue by 200% to HK$566.2 million, up 146.4% year-on-year, since the restart of its VIP lounge business. Despite the one-time costs due to renovations, asset depreciation, and transition to self-operation, the group's net loss widened to HK$282.1 million, but cash flow has significantly improved. The group's chairman, He Huangming, stated that after obtaining a temporary license from the Philippine gaming regulatory body PAGCOR in May 2024, the company initiated a comprehensive upgrade. The casino expansion project is expected to be completed within the year, with plans to add more gaming tables and slot machines, targeting high-net-worth customers and positioning for competition in the "post-POGO era" gaming market.
Financial Performance and Revenue Growth
The International Entertainment Group announced its annual report, with gaming revenue from its New Coast Hotel in Manila reaching HK$509.9 million, a significant increase of 200.1% year-on-year; total revenue reached HK$566.2 million, up 146.4% year-on-year. The performance growth was mainly due to the restart of the VIP lounge business and overall operational optimization.
Despite the significant increase in revenue, the group's net loss expanded to HK$282.1 million, mainly due to one-time transformation costs.
Business Transformation and License Acquisition
In May 2024, the International Entertainment Group obtained a temporary operating license from the Philippine gaming regulatory body PAGCOR, transitioning from lease-based to self-operation. The group immediately initiated a comprehensive upgrade plan, renovating hotel and casino facilities to enhance customer experience and market competitiveness.
The transformation includes hardware facility upgrades and operational model adjustments.
Reasons for Losses and Cash Flow Improvement
The net loss expanded to HK$282.1 million, mainly due to casino renovation downtime, asset depreciation, and one-time costs associated with the transition from leasing to self-operation. Despite the increase in book losses, the group emphasized that cash flow has significantly improved due to the restart of the VIP lounge business, and the operational condition is trending towards health.
The company believes the current investment lays the foundation for long-term growth.
Expansion Plans and Facility Upgrades
The casino expansion project at the New Coast Hotel is expected to be completed within the year, focusing on adding more gaming tables and slot machines on the first floor to provide a more upscale gaming experience. The hardware upgrade is part of the group's overall strategy to attract high-net-worth customers and increase market share.
The facility upgrades aim to adapt to the high-end trend of the Philippine gaming market.
Market Positioning and Development Strategy
Group Chairman He Huangming stated that the New Coast Hotel will seize the high-end customer group with its VIP area and intelligent operations. The company believes that the Philippines is in a period of reshaping the gaming market, and the "post-POGO era" will bring new competitive landscapes and market opportunities.
This strategy is based on the judgment of the trends in the Philippine gaming market.
Industry Background and Market Environment
The Philippine gaming industry is in a period of transformation, with the traditional POGO (offshore gaming operation) model declining and land-based casinos and VIP lounges regaining attention. The regulatory body PAGCOR is promoting the industry towards more standardized and higher quality development, encouraging investment in upgrading facilities and services.
The changing market environment provides new opportunities for capable operators.
Future Outlook and Competitive Landscape
He Huangming believes that the "post-POGO era" will initiate a new round of market competition, and the New Coast Hotel has secured a favorable position by proactively positioning its VIP lounge business and facility upgrades. The group will continue to focus on the needs of high-net-worth customers, enhancing service quality and user experience.
The company remains optimistic about the long-term prospects of the Philippine gaming market.
Investment Value and Risk Assessment
Despite the short-term expansion of losses, the group believes that strategic investments will bring long-term returns. The high growth of the VIP lounge business indicates strong market demand, and the improvement in cash flow also proves the enhancement of operational efficiency. Investors need to pay attention to changes in Philippine regulatory policies and market competition.
Investment in the gaming industry needs to balance short-term gains with long-term strategic value.
Social Responsibility and Compliance Operations
The International Entertainment Group emphasizes compliance and social responsibility in its business expansion. The company strictly adheres to all regulations set by PAGCOR, ensuring that business operations comply with legal and regulatory requirements, and is committed to promoting the healthy development of the Philippine gaming industry.
Compliance is the foundation for the long-term development of gaming operators.
