rollers,” Ng said in an interview. Huie describes the company as a technical services solutions provider of electronic gaming machines, and is one of just a handful of local agents. The company provides an integrated service from distribution to the operators, through to repairs and consulting on how to get games through Macau’s notoriously complex approvals process. “It may look easy, but there’s a lot of technique to get it right for the market, to launch any product onto the floor you need a lot of experience,” says Ng. “Once you are on the floor there is no room for mistakes.” Local preferences Although the market has undoubtedly been driven by new openings, those are now slowing down, with just two major players still to open their doors in the coming years. MGM China will open MGM Cotai in the first quarter of next year, while SJM Holdings’ Lisboa Palace has been delayed most likely to 2019. Despite, the end of the IR pipeline, APE says there is still plenty of room for growth in the Macau market. There are currently 18,000 machines on the floor in Macau and that will rise to 25,000 over the next two years. Beyond that, there will be ongoing renewals and servicing requirements that will keep the company busy. However, Ng notes that the casino floors
are by no means at capacity. He says in theory, Macau’s casinos could accommodate up to 50,000 machines, but a lot will depend on China’s appetite for expanding the gambling market. “If China can open the door bigger, the operators will buy more slot machines, there is space on the floor,” he says. Still, APE is no longer wholly focused on its home market and sees major room for expansion in both Southeast and East Asia. The company has already moved with the Macau operators overseas, following Melco Resorts & Entertainment into the Philippines and also supplies equipment and services to Genting in Malaysia. Although the minimum bets in the Philippines are lower, APE says there is a higher ratio of machines and more of a propensity towards social entertainmentdriven games. “I would put more social games into the Philippines to test, as you never know until you try,” Ng said. To push the company to the next level, it’s now holding an initial public offering to raise between HK$60 million ($7.7 million) and $90 million, with the shares scheduled to begin trading on the Growth Enterprise Market on November 15. “We went for a listing for several reasons,” Huie says. “The key was to access capital markets to fund our business plan as we move forward, but also to get better brand name and awareness, which will be
supportive to suppliers and manufacturers.” “We are very well known to our casino customers, but hopefully this will get us known in a newer market in southeast Asia as well.” Huie says the reaction from high net worth individuals and institutions the company has held talks with so far has been positive. “They like what we do.” Supplier support The company plans to use the funds for deposits to support suppliers in getting more trial products on the floor and also to expand its technical support facilities in Macau, with a new workshop and increased technical support staff. It also sees opportunities for leasing for selective customers, which it says should provide decent returns for the company. Another area for potential growth is in refurbishments, as machines in Macau are replaced. Refurbished models can’t be resold in Macau, but APE says it’s getting a lot of enquiries from places such as Cambodia and Southeast Asia. Most are trading companies that take refurbished machines and distribute them through their channels. As one of the few truly local gaming companies, APE says it’s confident that in the future Macau will have more homegrown talent in the industry, not just in distribution but also in product design.
Asia Gaming Briefings | November 2017
Published on Nov 10, 2017