The six-month rally that has sent casino operator Melco Crown Entertainment to a record high is not scaring away stock analysts.
Melco, which runs two gambling resorts in Macau, has the highest consensus analyst ranking among the city's 10 casino companies with at least five ratings. The firm said in November that it was making "significant progress" in construction of a third Macau resort as it tapped into a baccarat boom that drove up gaming revenue 18 per cent in the city last year.
"Macau has a tonne of momentum right now and trends have never been stronger, hence, valuations have never been higher," said Grant Govertsen, an analyst at Union Gaming. "In all likelihood, analysts' estimates for 2014 are still too low."
American depositary receipts of Hong Kong-based Melco climbed 4.6 per cent in its eighth consecutive week of gains, reaching a record US$44.97 on January 17. They have climbed 90 per cent over the past six months.
The Bloomberg China-US Equity Index of the most-traded Chinese stocks in New York slipped 0.6 per cent to 102.44 points last week as Sina posted the biggest drop in 14 months while E-House China tumbled to a one-month low.
Besides building the Studio City resort in Macau's Cotai area, Melco is expanding overseas and has partnered with Belle to develop and operate a casino resort in Manila, which is expected to start operation in the middle of the year. Belle holds one of four casino licences in the Philippines.