DNA - Donaco International

Appears the stock as gone unnoticed here



Latest ASX announcement:- http://stocknessmonster.com/news-item?S=DNA&E=ASX&N=763610

Oh well you had your chance.....

Daily Update:-

Have had this one on my watchlist for a few weeks.Interesting casino they have in Vietnam,just over the border from China-about four hours by train from Kunming.The old Hanoi to Kunming railway has been closed for a couple of years or more due to landslides in the mountains.Would have mad a good tourist trip for foreigners from Hanoi-as Vietnamese are not allowed to gamble at this casino it seems,The danger to their earnings is if China put restrictions on people crossing the border,or competition is allowed in China,around Kunming.
But I see that they are working to diversify their earnings.I must do more homework before I take the plunge on this one ,but it is interesting.

The share price has been increasing rapidly!

DONACO INTERNATIONAL FPO (ORDINARY FULLY PAID)
Wed 19 Mar 2014 12:09 PM (Sydney time)
DNA $1.570 $+0.065 (+4.32%)

High for today has been $1.610

569

http://www.afr.com/latestnews
Donaco International in $60m placement. Gaming group Donaco International is seeking to raise $60 million in a two-tranche placement through broker

Gaming group Donaco International is seeking to raise $60 million in a two-tranche placement through broker Canaccord Genuity.

MARKET RELEASE
20 March 2014
Donaco International Limited
TRADING HALT
The securities of Donaco International Limited (the “Company ”) will be placed in Trading Halt Session State at the request of the Company , pending the release of an announcement by the Company . Unless ASX decides otherwise, the securities will remain in Trading Halt Session State until the earlier of the commencement of normal trading on Tuesday, 25 March 2014 or when the announcement is released to the market.

Dear
Mr Weaver
Request for Trading Halt

In accordance with ASX Listing Rule 17.1, Donaco International Limited (“Donaco”) (ASX: DNA) requests that ASX grants a trading halt of its securities, effective immediately, on the following basis:
1. Donaco expects to make a material announcement about a proposed capital raising;
2. Donaco requests the trading halt to be applied for 2 trading days , or until the announcement is made;
3. Donaco expects that the trading halt will be ended when the pending announcement is made; and
4. Donaco is not aware of any reason why the trading halt should not be granted.

ABOUT DONACO INTERNATIONAL LIMITED (ASX: DNA)
Donaco International Limited operates leisure, entertainment and associated technology businesses across the Asia Pacific region.

Our flagship business is the Lao Cai International Hotel, a successful boutique casino in northern Vietnam.

The Lao Cai International Hotel was established in 2002, and is located on the border with Yunnan Province, China. Donaco operates the business and owns a 75% interest, in a joint venture with the Government of Vietnam.

The Lao Cai International Hotel is a pioneer casino operator in Vietnam. The property is currently being expanded from a 3 -star 34 room hotel, to a brand new 5 - star resort complex with 428 hotel rooms.

Donaco also owns and operates successful gaming technology businesses, including secure mobile
payment gateways across South East Asia, and the Way2Bet wagering portal, whose customers include all major corporate bookmakers in Australia.

To learn more about Donaco visit
www.donacointernational.com

649

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01503641

ASX RELEASE
25 March 2014
Successful Completion of Placement

Donaco International Limited (the Company) announces that it has received binding commitments from institutional and sophisticated investors in Australia and overseas for a private placement of 56.39 million shares at A$1.33 per share, to raise A$75 million.

The placement, which was substantially oversubscribed, was undertaken pursuant to Section 708 of the Corporations Act. It will be completed in two tranches, with the first tranche consisting of 26.75m shares, which is within the Company’s 15% annual placement capacity. The remaining 29.64m shares will be subject to shareholder approval at an Extraordinary General Meeting.

Managing Director and CEO, Mr Joey Lim, said “We are very pleased that with the support of our investors, we are in a position to pursue our strategy of investing in leisure and entertainment assets in Asia Pacific.

“The strong performance of our flagship business, the Lao Cai International Hotel in Vietnam, has given us confidence in the huge potential of the growth in tourism in Asia, and the substantial unmet demand for leisure and entertainment offerings.

“None of the funds that we are raising today are intended for use at our existing hotel and casino business at Lao Cai. The construction of our new five star hotel property continues on time and on budget, and is on track for a soft opening in May 2014. We have sufficient funds to ensure the liquidity of our much larger gaming business in the new property, and we are very encouraged by the response to our pre-opening marketing.

“The Board and management team has maintained a very strong focus on the completion of our new hotel at Lao Cai. However, we have always stated that Donaco was never intended to be a single asset company. Accordingly, we have continued to examine potential investments in other assets, where we can leverage our strengths and expertise in gaming and hospitality operations.

“Although we cannot give details of these potential investments today, a number of them are close to fruition. As we are engaged in competitive processes, we cannot guarantee that any deals will be concluded in the short term. However the pipeline of deals is very strong, and today’s successful raising will greatly enhance our ability to conclude a deal.

“We are extremely disciplined in our approach to potential deals. We will not overpay for any asset. We will not conclude a deal unless we are confident that it will generate strong returns for shareholders. We will ensure that any deal is within our core area of expertise, and taps the huge demand for gaming services from the expanding middle class in Asia.”

As a result of this announcement, the Company’s shares will resume trading when the market opens today.

Canaccord Genuity (Australia) Limited acted as sole lead manager to the placement.

720

22/07/2014 On-Market Buy-Back and Appendix 3C
http://www.asx.com.au/asxpdf/20140722/pdf/42qybtqyjd89lc.pdf

ASX R E L E A S E
22 July 2014
On-Market Buy-back and Appendix 3C

Donaco International Limited (the Company) announces that it intends to implement an
on-market buy-back for a maximum of 37.2 million shares, representing a maximum of 8%
of its ordinary shares.

The buy-back is being undertaken as part of the Company’s ongoing capital management
program. It is expected to commence on or after 6 August 2014.

Managing Director and Chief Executive Officer, Mr Joey Lim, stated “The Board considers that the buy-back is in the best interests of all shareholders, and that the market price of shares of late does not properly reflect the Company’s underlying value and potential.

“The Company has a substantial amount of cash on our balance sheet, with negligible debt, and more cash from operations constantly being added. This balance sheet strength gives us considerable firepower to pursue a strong pipeline of acquisition and investment opportunities, which we are actively working on.

“At the same time, our primary focus in assessing all investment opportunities is to ensure a
strong return for shareholders. Buying the Company’s shares at recent prices represents an
excellent opportunity to generate strong returns.

“The buy-back will be earnings per share accretive, and will have no impact on current operating businesses. It is also consistent with our strategy of maintaining an efficient capital structure.”

In accordance with the ASX Listing Rules, the prices paid for shares purchased under the buyback will be no more than 5% above the average closing price of the Company’s shares over the five prior trading days.

The total number of shares to be purchased by the Company under the buy-back will depend on market conditions and volumes. The buy-back will be open for 12 months.

For further information:
Ben Reichel
Executive Director
Phone: + 61 412 060 281

1184

is this teh company which is a gambling hotel along the laos/chinese border?
IMHO you need to treat it wioth the attached risks:
DYOR

qldfrog said:

is this teh company which is a gambling hotel along the laos/chinese border?
IMHO you need to treat it wioth the attached risks:
DYOR

Click to expand...

It's a gaming holel in the Vietnamese/Chinese border. They recently opend a new 5-star hotel with a large increased number of rooms and gaming tables. It's hard to see them not filling them up with patrons, barring political tension causing substantial decrease in gambling visitors.

It's a bit hard to pin down the earnings from such a venture, given the hotel only opened a couple of months ago. The price action since the end of construction / openning / trading update etc has been pretty negative, and I can't quite explain why.

Can you give some example of the attached risks? Thanks.

China recently moved a oil rig into Vietnamese waters, not happy neighbors at the moment.

robusta said:

China recently moved a oil rig into Vietnamese waters, not happy neighbors at the moment.

Click to expand...

Thanks. I am aware of this and according to some reports, Chinese tourists to Vietnam is down sharply. However, the hotels are basically gaming destinations. Their patrons are sources from juncket operators and really, they do nothing but gaming within the hotel premise. And any perceived risk due to the recent dispute is surely temporary in nature. It seems a bit oversold if that's the only reason... however, when I say oversold it's in relation to previous highs >$1.30. It could simply be just overbought back then.

I might attempt some valuation in the next few days.

skc said:

Can you give some example of the attached risks? Thanks.

Click to expand...

where do I start?
a one asset company with one customer base, one target market, where 100% of equity can be found ina few km square,
geopolitical risk,
triad,
physical risk: flood/earthquake,
currency,
political


But DYOR
It can make you rich, as can any junior mining company, and I once had some trading shares until such time i realised whhat was behind the code and found it not to my taste risk wise;
There was an interesting article in the AFR on this company a few months back sadly, i can not access it.
Can anyone?

qldfrog said:

where do I start?
a one asset company with one customer base, one target market, where 100% of equity can be found ina few km square,
geopolitical risk,
triad,
physical risk: flood/earthquake,
currency,
political

Click to expand...

Thanks. These are pretty generic risks that applies to almost all companies operating overseas, and insurance (assuming they are in place) would cover a lot of these.

qldfrog said:

There was an interesting article in the AFR on this company a few months back sadly, i can not access it.
Can anyone?

Click to expand...

Do you have the link at least? I can post here to the extent allowed by copyright.

I read it in a week end paper edition of AFR
This could be http://www.afr.com/p/national/arts_saleroom/vietnam_casino_chinese_gamblers_fxIYt2BxMtDIyqBX7AvbWOhttp://www.afr.com/p/national/arts_saleroom/vietnam_casino_chinese_gamblers_fxIYt2BxMtDIyqBX7AvbWO
for the afr subscriber, the first sentence seems familiar..

qldfrog said:

I read it in a week end paper edition of AFR
This could be http://www.afr.com/p/national/arts_saleroom/vietnam_casino_chinese_gamblers_fxIYt2BxMtDIyqBX7AvbWOhttp://www.afr.com/p/national/arts_saleroom/vietnam_casino_chinese_gamblers_fxIYt2BxMtDIyqBX7AvbWO
for the afr subscriber, the first sentence seems familiar..

Click to expand...

Thanks for the link. Here are some snippets. It's dated 17 May.

http://www.afr.com/p/national/arts_saleroom/vietnam_casino_chinese_gamblers_fxIYt2BxMtDIyqBX7AvbWO

At least another 600 billion yuan is reportedly spent in offshore casinos, including China’s special autonomous region of Macau, the only place in the country where they are allowed. Glamorous Macau, a smaller market than Las Vegas in 2006, is now more than seven times the size of that American landmark. Last year, Macau reported gambling revenue of $US45 billion.

Click to expand...

As the federal government pushes businesses to become part of the “Asian Century” and Donaco opens up a new and much bigger venue in Lao Cai, the challenge for local investors is to look beyond the numbers.

They must balance the huge growth potential of this casino, on the doorstep of the largest gambling market in the world, against the risks associated with a regulatory environment that, at the very best, could be called opaque, and the ever-present geo*political tensions between the communist governments of China and Vietnam.

Click to expand...

The reality is this business relies entirely on the free flow of people and funds across the Chinese-Vietnamese border. The threat of border closures looms large, particularly as diplomatic relations deteriorate. China’s foreign ministry said on Thursday it was “shocked” by the “trashing and burning activities” in the riots and said they had “every*thing to do with Vietnam indulgence”.

At the very least, the latest violence is expected to lead to greater scrutiny along the border of both legal and illegal crossings. Last week, AFR Weekend spoke to at least 10 people in Lao Cai and Hekou, on the Chinese side, who claim illegal border crossings are still one of the most popular ways for Chinese people to gain access to the casino.

Click to expand...

He explains that the smaller, understated operation appeals to the type of gamblers that wouldn’t quite make it as VIPs in Macau.

Spend $100,000 in Macau and you’ll be lucky to get noticed among the super wealthy; in Lao Cai, you’ll be treated to free accommodation, use of a Mercedes-Benz SUV and private gaming rooms.

“Macau is for the super rich,” says Chen, a junket operator from Zhejiang province, south of Shanghai, earning commissions for bringing players to the casino. “Here the ‘middle’ rich are treated like high rollers.”

Click to expand...

The rest of the article gives a backstory of the Lim's and how they come to choose Vietnam for the casino, and Australia for investors. It also talks about regulatory risks in border crossing and capital flow restrictions. It's a good long article.

Will good news if happens!!

Today DNA $0.950 +$0.055 +6.15% volume 2,252,082

13/08/2014.. 0.895.. 2,636,519
12/08/2014.. 0.850.. 874,115
11/08/2014.. 0.850.. 1,013,493
08/08/2014.. 0.870.. 642,320
07/08/2014..0.875.. 922,929


http://www.asiagamblingbrief.com/intelligence/latest-headlines/content/45-vietnam

Wednesday, 13 August 2014 11:15
Vietnam moves to lift locals casino ban

The Ministry of Finance has completed a controversial draft decree that could open casinos to Vietnamese gamblers, local press reported. According to the draft being submitted to PM Dung for approval, casinos will be open to Vietnamese citizens aged 21 and up who will have to meet certain background and financial criteria that the government will define at a later date. The regulation's authors also proposed banning casinos from operating online gambling services, Thanh Nien Daily reported.

Vietnam's casinos are currently only open to foreign passport holders. The draft decree proposed that the Prime Minister select which casinos will become open to local gamblers. The final draft also proposed easing requirements for casino investors in Vietnam. Investors or managing partners will only be required to demonstrate at least five years experience, instead of ten years as suggested in a previous draft.

However, the finance ministry maintained that gaming companies need to invest at least $4 billion and has the operation of a maximum of 200 tables and 2,000 machines.

The draft decree proposed capping maximum fines for investment violations at $9,400 combined with a 18 month license suspension for repeated violations, local press reported.

1537

PM - Capital posted this on DNA back in August.

http://www.pmcapital.com.au/news/webinars_and_videos/donaco__dna_investment_thesis151.aspx

Well looks like they are buying something I wonder if it's Le Macau or The Titan?

robusta said:

Well looks like they are buying something I wonder if it's Le Macau or The Titan?

Click to expand...

Which one would you bet on robusta?