2016 All-Asia Research Team: Gaming & Lodging, No. 1: Kam Chung (Kenneth) Fong & team

Kam Chung (Kenneth)
Fong & team

Credit Suisse

First-Place Appearances: 1

Total Appearances: 7

Team Debut: 2009

Kam Chung (Kenneth) Fongushers Credit Suisse’s regional gaming and lodging squad from third place to its first appearance in the winner’s circle, bumping three-year champion Bank of America Merrill Lynch to No. 2. Little wonder, given clients’ wide-ranging praise. For example, one portfolio manager offers that Fong and his colleagues “consistently make good calls and produce detailed research reports, have among the best corporate access and industry contacts, were the first to call the sector bottom and have good relationships with managements.” With eight analysts working across Hong Kong, Kuala Lumpur, Manila and Seoul, the group monitors 20 companies in this space. They have a positive outlook for the sector as a whole and expect gross gaming revenue to rise 8 percent in 2016. “We believe that improving China liquidity, gradual visa relaxation and better property price performance could gradually filter into the demand that will drive a continued recovery,” says the 38-year-old leader. Over the medium term, he adds, “the potential introduction of more supportive policies, such as an increase in the individual visitation scheme for the Guangdong province and business visas, would be an upside option that is not currently in our numbers.” Wynn Macau, an integrated casino and resort facilities operator, is the researchers’ preferred player. Given its luxury positioning, Wynn is a key beneficiary of recovering high-end demand in Macau, they advise, and is best poised to leverage gains from the industry rebound via a new casino opening in August. Moreover, the company’s executive team has a solid track record, Fong notes, and its stock is trading at an undemanding valuation, at an implied 1 times price to book for the new project. Credit Suisse pegs Wynn shares at HK$14.50; they closed at HK$11.54 late last month. Fong has directed the firm’s regional gaming and lodging research efforts since signing on in June 2014 from J.P. Morgan, whose crews he led to three appearances on this roster, including third-place showings that year and in 2013. He previously worked on the research desks at Nomura and Lehman Brothers and spent several years in auditing at PricewaterhouseCoopers. The analyst holds an MBA from the Columbia Business School in New York, as well as a bachelor’s degree in accountancy from Hong Kong Polytechnic University. Fong “was among the first to recommend taking profits after the stocks he picked outperformed massively,” another admirer attests. “I follow his research calls very closely.”