Wynn Macau's earnings slipped 4% to USD290.1m

But here's some good news.

According to Maybank Kim Eng, Wynn reported 2Q13 net revenues of USD930.9m up 2.6% YoY (2Q12: USD907.6m). 

However, EBITDA fell 4.0% YoY to USD290.1m (2Q12:USD302.2m). This compares with Maybank's bearish estimates of USD258m and Bloomberg consensus of USD289m (in-line).

Here's more:

Implication: Wynn‘s turnover in the VIP segment was USD29.9b in 2Q13, registering a slight 1.6% YoY decline (2Q12: USD30.3b), which was mitigated by a higher VIP win percentage for 2Q13 of 2.94% (2Q12: 2.79%).

The performance in the mass market segment improved as mass market wins increased 8.5% to USD217.0m. Furthermore, mass market table’s win per unit per day continued to climb, up 6.5% YoY to USD11,671 from USD10,963 per table in 2Q12.

Action: We advocate our contrarian SELL on Wynn Macau with a low end of the Street HKD18.60 TP. Wynn’s market share continues to decline as competition from Cotai operators intensifies and growth is still trailing peers.

The stock trades at rich FY13/14 EV/EBITDA valuations of 13.2x/12.1x, a premium to the sector average of 12x. Wynn’s 2Q13 market share fell to a record low of 10.6% (2Q12: 12.0%). The group has reached an agreement with Leighton Contractors for Wynn Palace project for a maximum price of USD2.57b.

We expect a 2016 opening with a total construction cost likely to be USD4b.