Just a few years ago, Melco International Development was losing money and its principal asset was Stanley Ho Hung-sun's 30-year-old Jumbo Kingdom floating restaurant anchored in Aberdeen.
Today the company is controlled by Mr Ho's 31-year-old son, Lawrence Ho Yau-lung, and boasts a market value in excess of HK$13 billion, bolstered by a deal-making bonanza last year that added to its portfolio of businesses ranging from ski slopes on the mainland to slot machines in Southeast Asia. This is, of course, in addition to its most prized asset - a 37.85 per cent stake in Nasdaq-listed Melco PBL Entertainment, a gaming joint venture with Australian billionaire James Packer.
Despite the traditional conglomerate model characterised by sprawling but disjointed investments having lost some of its lustre among investors in recent years, Melco International recently started to bill itself as a 'new generation Asian conglomerate'.
Whatever that means, it appears to appeal to investors. Of the 11 analysts that cover the stock, 10 rate it a 'buy' and one a 'hold'. On average they target a share price of HK$14.48, implying a bullish 29 per cent upside from Melco International's closing price of HK$11.24 last week.
Melco International now trades at 38 times projected earnings - a slight discount to Macau gaming rivals Las Vegas Sands Corp and Wynn Resorts, but a premium to Galaxy Entertainment and MGM Mirage.
A closer look at Melco International's results, however, suggests it has a lot of work to do before most of its recent acquisitions become positive contributors to core earnings.