Donaco share price discussion

Donaco share price

Why is Donacotrading at 3.3 cents and not 15 cents ? here’s what I think:

Current share pricedo not represent actual value of the company

- Demand and supply, there’s not much buyers. But lots of sellers, who need cash. So they dump the shares.

- Donaco is perceived to the a speculative investment and not blue chip.. (but then again in this environment. Star Casino and Crown Casino ain’t blue chip either, personally I think Aristo and Star Vegas has a better chance of getting back to normal than Crown and Star Casino)

- Mega bank yet to approve the deal between Donaco and Somboon.. (this will be approve, as there is no reason for Mega bank not to approve)

- Mega Covenant due in June. (again, this should be approve, if not ASM is a billion dollars fund and should have no problem sourcing $20m)

- Border close (well, Thailand depend on tourism. I don’t think they can close their border for too long. Also the infection rate in Thailand and Cambodia are low. Transmission rate south east asia countries are low..They could create a sterile bubble between the SEA countries.. As for Aristo, border between China and Vietnam will be delay in reopening. But again, Vietnam depend on tourism, especially the Sapa region of Lao Cai which is 30km from Aristo casino location)

- Clientele are scare of travelling in confine space (this is actually good for Donaco, as the two casino are only a couple of hours drive by private car and buses from Major cities, patron don’t need to catch a plane to get to the casino)

- Online gaming competition.. (unlike Australia and most western countries, Thailand and China actually forbid and have law against their citizen accessing and participating in online gambling, therefore Thai and Chinese are at risk each time they access online casino. This encourage them to seek out the closest casino to scratch their gambling itch)

- Economic downturn, less people will gamble (yes, this is true in some context. However just look at the stimulus provided everywhere around the world, the world is awash with cash)

POSTITIVE FOR DONACO

- This health crisis mean lots and lots of smaller casino in Poipet will crash out, which will lead to more patrons for Star Vegas and Galaxy. Also, there might be government restriction. Which smaller casino cannot comply.. so better for larger player like Donaco.

- Travel restriction, especially air travel restriction and increase cost and frequency of flight means people will choose land base travel method. This is good for Danaco as both casino are amongst the best, closest to Bangkok and Kunming

- People from Yunnan are likely to avoid Macau and choose Aristo instead. 2 reasons, Yunnan and Vietnam have low infection rate. Chinese will avoid other Chinese cluster. Also, Macau has increase surveillance. VIP Players don’t want to have their financial expose to Chinese government, so they will choose an oversea destination like Aristo instead.

- Global anti sentiment against Chinese, this would lead to Chinese travellers avoiding traditional western oversea destination, such as Australia, US, Europe. Instead they will be travelling closer to home. Cambodia and Vietnam are cheaper destination for Chinese

- Donaco have cash to hold out for the next 12 months. But the crisis, look like it has abate already in Vietnam and Cambodia.

- Net Tangible Asset is 14.5 cents, that’s about 4 times current share price.. remember Star Vegas was bought for $360mn USD, Aristo built for $50mn USD.. So Donaco cost for the 2 casino was, in today price $645mn AUD.. that’s 20 fold current company market cap. Sure there has been huge legal issues, and the future aren’t as rosy.. but for assets to drop 20 fold. That’s crazy

- Donaco has never make an operational lose, yes. There is statutory loss. Due to net tangible asset, license write down.. but Donaco has always make money for the past couple years. Even through the legal crisis.

any other point anyone want to comment on ?? so why the blardy hell is the share price still languishing at 3.3 cents ?