There aren't many companies in the ASX 100 that can boast of having one of the best performing share prices of 2013, a strong pipeline of growth initiatives, exposure to the lucrative Asian tourism market, and a monopoly in a number of its operating regions.
The company also continues to explore further growth opportunities which could result in strong earnings growth all the way to 2020 and beyond. This company has strong ties to Asia through an extraordinarily successful joint venture based in Macau, and is planning on capitalising on the growing Asian middle class by opening new casinos in Sri Lanka and now Japan. Which company am I talking about?
None other than the James Packer-led, luxury casino resort owner Crown Resorts Ltd (ASX: CWN). Crown's extraordinarily successful 2013 saw the company's share price rise by over 60% as the company won a tender to develop the new luxury casino and entertainment complex at Barangaroo in Sydney. The rise in house prices and interest in the Sydney market by wealthy Asian business people vindicates this decision, as the new casino will be aimed solely at high-stakes or VIP customers.
In addition to the new Sydney complex, Crown is upgrading existing facilities in Melbourne and Perth, where the company owns the only licenced casinos in the states, and is negotiating with the Sri Lankan, Vietnamese and South Korean governments about new casino resort developments in those countries. The latest news however, could be the most significant!
Crown Japan
In an interview with The Australian newspaper earlier this week, Crown executive Todd Nisbet revealed ongoing negotiations with the Japanese Government and local businesses about a US$5 billion integrated resort and casino complex to be completed before the 2020 Olympic Games. Crown would pursue the opportunity via its Asian joint venture Melco Crown, whose flagship City of Dreams mega-resort in Macau has delivered terrific returns so far.
Crown views the opportunity as a game-changer and would be a huge win for the Australian company if the local government decides to ease regulations around casinos and awards Melco Crown and partners the licence. Mr Nisbet noted that Japan could potentially be a US$40 billion per year gaming market if restrictions on gambling are lifted.
Foolish takeaway
Crown Resorts is one of my favourite stocks at the moment. Its growth opportunities, particularly in Asia, are second to none and risk of funding problems appear low assuming there are no unexpected global economic meltdowns. After its stellar rise in 2013, Crown's share price is flat so far in 2014. The company is trading on a trailing price-to-earnings ratio of 20, which appears reasonable for a company with its growth prospects. Crown looks to me like a great long-term investment for Foolish investors.