The future prospects of Universal Entertainment Corporation reportedly now look good after the Japanese casino and entertainments conglomerate managed to prevail in a long-running legal dispute with its former Chairman, Kazuo Okada.
According to a Monday report from Inside Asian Gaming, this is the opinion of boutique investments firm Union Gaming following a ruling from the highest appeals court in Japan that essentially prevents 77-year-old Okada from regaining effective control of the Tokyo-headquartered firm.
Union Gaming analyst, John DeCree, reportedly declared that Tokyo-listed Universal Entertainment Corporation is now at an ‘exciting inflection point’ and will be able to ‘finally declare victory’ after Okada lost an appeal against his contested 2017 ousting from the firm’s board of directors.
DeCree reportedly stated…
“As a safeguard, Universal Entertainment Corporation has also undergone a corporate restructuring to prevent Okada from having any control over the casino businesses even if he somehow regained a board seat. While the legal battle will likely linger, it appears that there is virtually no way for Okada to regain any control or influence over the company, removing a long-running overhang for the shares.”
DeCree also initiated a ‘buy rating’ on shares in Universal Entertainment Corporation with an individual guide price of approximately $39.60 after predicting that the firm is expected to chalk up increased third-quarter sales of pachislot and pachinko units. The analyst purportedly stated that this forecast is down to the emergence of new Japanese legislation that now requires such machines to be replaced at least every three years.
Reportedly read the statement from DeCree…
“After several quarters of tepid replacement sales, there is a significant number of units in the existing installed base that are required to be replaced beginning in the third quarter of 2019.”
Finally, Inside Asian Gaming reported that Universal Entertainment Corporation is moreover due to benefit from the impending opening of 350 hotel rooms at its Okada Manila integrated casino resort. DeCree announced that this final complement is contained within the Philippines facility’s Tower B and is expected to come online during the second quarter of 2020.
According to the Union Gaming analyst…
“This will give the property its full complement of about 1,000 rooms to help accelerate mass-market revenue growth. Further, Okada Manila has not been impacted by the same VIP headwinds Macau casinos are facing with VIP volumes up 30% quarter to date at the property, [which points] to a solid third quarter. The Philippines is one of the fastest growing gaming markets in the world and when complete Okada Manila is positioned to be a category killer in the market.”