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Dow Jones Newswires: Wynn Macau shares fall after reporting third-quarter loss

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Shares of Hong Kong-listed casino company Wynn Macau
1128,
-2.26%

fell in early Asian trade Thursday after the company reported a third-quarter loss and as COVID-19 cases continue to rise in China.

The casino operator’s shares fell as much as 7.0% to 3.71 Hong Kong dollars (US$0.47) in early trade and were last 2.5% lower at HK$3.89.

In its earnings release, Wynn Macau reported that its net loss widened to US$242.0 million in the third quarter, compared with a loss of US$179.9 million a year ago.

The casino operator’s third-quarter earnings were hurt by a suspension of its casino operations for a 12-day period in July in response to a COVID-19 outbreak in Macau, the company said in its earnings release Thursday.

The casino operator’s future revenue growth will likely continue to be influenced by quarantine and zero-COVID policies in China and their impact on inbound travel, wrote Jefferies analyst Andrew Lee in a note.

The analyst added that it is “still a waiting game for eventual recovery” for Wynn Macau, although “the fear of lockdown is still deterring travelers.” The U.S. investment bank has a hold rating and target price of HK$4.50 on the stock.

There could be a looming risk of further COVID-19 restrictions in China as cases continue to climb in the city of Guangzhou, which is the country’s fourth largest city by urban population, said Nomura analysts in a note.

Investors should “closely monitor COVID development and lockdown measures in Guangzhou due both to its sheer size and the implications for China’s zero-COVID policies,” the analysts added. So far, multiple districts in the city have been locked down, and several flights from the city have been cancelled, Nomura said.

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