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Melco Adds NUWA Brand to Enrich City of Dreams Property

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Melco Resorts & Entertainment Limited (MLCO - Free Report) recently announced the launch of a luxury hotel brand, NUWA.

Scheduled to be launched in Macau and Manila on Jan 16, 2018, the brand launch is in line with the company’s plan to present phase III of City of Dreams Macau in the second quarter of 2018.

The brand will substitute the Crown Towers Hotels, which is slated to expire soon. The company had revealed a plan to replace Crown Towers in the last reported quarter.

We observe that shares of this Hong Kong-based provider of casino gaming and entertainment have rallied 79.8% so far this year, outperforming the industry’s gain of 44.1%.




City of Dreams Strong on Nuwa

City of Dreams, Melco’s flagship property, is under the third phase of development and has been raking in significant revenues so far. In fact, in the first nine months of 2017, City of Dreams witnessed 2.6% year-over-year growth in revenues per available room (RevPAR). In the same time frame, occupancy per available room increased 200 basis points (bps) from the year-ago period.

With introduction of NUWA, Melco is strengthening its operations in City of Dreams. The company believes that an increase in luxury hotel room inventory will bode well for the property's gaming operations. Further, long-term growth at the property will be driven by the company’s core mission to enhance guest experience.

Other Plans

Moreover, in this phase of development, Melco plans to open The Morpheus Hotel which will add almost 800 luxury hotel rooms and villas to the property. Additionally, the company plans on rebranding The Count:Down into a new hotel concept that will enrich guest experience in City of Dreams.

Wrapping Up

Melco has been actively responding to a rapidly evolving market and has capitalized on significant VIP business and cash flow with the expansion of its gaming segment. We believe that the addition of NUWA to City of Dreams will help Melco continue with its core business strategy of pursuing quality and in turn driving traffic.

Zacks Rank and Stocks to Consider

Melco carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the industry are Churchill Downs Incorporated (CHDN - Free Report) , Wynn Resorts, Limited (WYNN - Free Report) and Monarch Casino & Resort, Inc. (MCRI - Free Report) . While Churchill Downs and Wynn Resorts sport a Zacks Rank #1 (Strong Buy), Monarch carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Current-year expected earnings growth for Churchill Downs is 26.4%.

Wynn Resorts’ current-year earnings are expected to increase 58%.

Monarch’s earnings for the current year are projected to grow nearly 9%.

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