Galaxy Entertainment Group Ltd, which reported its best half-year earnings since 2005, said it saw signs of recovery in Macau's gaming sector and would welcome Las Vegas operators listing their Macau assets in Hong Kong.

Las Vegas Sands Corp is planning to spin off a Macau asset for listing on the Hong Kong stock exchange and sources have said that Wynn Resorts has filed for a listing, expected to start in October.

Macau's gaming stocks are trading at a higher earnings multiple in Hong Kong than peers listed in other markets, Galaxy Vice Chairman Francis Lui told reporters at a briefing for the company's first-half results.

He said good valuation attracted foreign operators in Macau to list in Hong Kong and if Sands and Wynn listed on the bourse it would benefit the Macau gaming market.

People can see that the recovery of Macau's gaming market is the fastest and the outlook is the brightest and with the IPOs (initial public offerings), I hope we can see a re-rating (of the sector) very soon, he added.

Lui said that Macau's gaming revenue this year was expected to reach the same level as in 2008 and could rise about 10 percent in 2010 from 2009.

Macau's monthly gaming revenue hit a record high in August of HK$10.9 billion, after falling 12.5 percent year-on-year to HK$49.9 billion in the first half when it was hit by a global economic slowdown and Beijing's policy to tighten restrictions on Chinese visitors to Macau, according Galaxy.

Wynn Resorts, which operates one casino in the Chinese gambling enclave and will open a second there next year, plans to raise up to $1 billion by listing its Macau assets in Hong Kong, two sources told Reuters last week.

Sands has hired Goldman Sachs to look at a potential Hong Kong listing and has sold $600 million in bonds, which will have to be swapped for shares of its Macau unit after the expected IPO on the Hong Kong stock exchange.

With Wynn and Sands doing IPOs, you are having a whole new market of investors focusing on the world's largest (gaming) market that can only help folks and other operators in the market, said Robert Drake, Galaxy's group chief financial officer.

Galaxy said on Friday that it had a net profit of HK$1.06 billion ($136.8 million) for the first six months of the year, fuelled by an one-off gain of HK$819 million from buyback of guaranteed and convertible notes. This compared with a loss of HK$7.43 billion a year earlier.

It beat rivals including Melco International Development, which posted a loss in the first half, and SJM Holdings, which reported a 41 percent profit fall.

Shares of Galaxy closed down 5.2 percent at HK$3.46 on Friday but have more than tripled this year, outperforming a 50 percent gain on the broader market .HSI in the same period.

($1=HK$7.749) (Reporting by Alison Leung; Editing by Karen Foster)

China Gaming