Crown Resorts Limited (ASX: CWN)

CWN had its annual general meeting on November 1, 2018. Company presented its yearly financials along with prospects for the future.

Moderate Y-O-Y financial metrics:Group posted an overall 6.1% rise in the normalised EBITDA.Normalised EBIT increased by 11.5% up to US$592.4m from US$531.2m. Group reported Net profit after tax before significant items attributable to the parent posted 5.8% rise to $326.7 million in FY18.

Focus on new Investments: The companies' rigorous investment in Australian resorts builds a strong portfolio. The company’s core portfolio includes some of the most valuable current and future tourism assets in Australia across Melbourne, Perth and Sydney. Capital expenditure of approximately $2 billion was recorded for the period between FY14-FY18, which includes the development capex associated with the Crown Sydney hotel resort and the completion of Crown Towers Perth. The company projects the capital expenditure of approximately $1.8 billion to be spent from FY19-FY21. $1.5 billion of which will be contributed for the construction of the Crown Sydney hotel resort. Total of $3.8 billion investment will be made by the group between FY14-FY21.

Technically, the scrip is in downturn from the month of August and making lower lows with trading at the lower bollinger band. Relative strength index (RSI) indicates oversold territory and Moving average and convergence indicator (MACD) is in negative territory; and these signal that the current levels are good to hold and wait for bounce back from the lower levels.

The market cap of CWN was recorded at $8.2 bn, with P/E of 14.79x as on November 5. At current juncture scrip is trading at the price levels of $11.89.Moderate financial performance with focus on new investments, and trading at oversold territory as per technical charts, exhibit a “Hold” at the current levels of $11.89.

Sydney Airport (ASX: SYD)

SYD noticed two positive announcements from the Commonwealth Government. Improved bilateral air services arrangements with Fiji and the Philippines will increase the number of available seats for airlines of both the countries and will open growth opportunities for Sydney airport.

Meanwhile, holiday season impacted the daily traffic. School holiday period impacted the daily traffic figures reported under traffic performance report. Fall of 0.5% was noticed under the domestic passengers category. Total and international passengers grew by 2.95 and 4.8% respectively for the calendar year 2018.

Moderate financials:SYD posted 3.7% drop in net profit margins attributable to the security holders up to 22.5% in 1H18 as compared to 23.3% in 1H17. Operating expenses posted 7% rise during the period.

Exploring new markets:SYD is exploring emerging markets to tap further growth opportunities. In June 2018, new open skies agreement between India and Australia has been done. During 1H18, 17% growth was reported under the category of the Indian visitors to Sydney. Company is working on exploring new market places and new opportunities under different segments.

Technically,the scrip has remained flat from the month of June and then continued with the downtrend from the month of September. The scrip is trading near the lower bollinger band and major indicators like Relative strength index (RSI) and Moving average convergence and divergence indicator (MACD) in consolidated positive zone indicate to watch the scrip and wait for a perfect reversal on the charts.

The market cap of SYD was recorded at $14.43bn, with P/E of 40.40x as on November 5. At current juncture, scrip is trading at the price levels of $6.33. Moderate operating and financial metrics with expansion plans in the emerging markets and trading at lower zone of the Bollinger bands as per technical charts, exhibit a wait and watch stance at the current levels.
 

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