AERL: here is a nice post from YMB that sheds some light on the red hot question of legitimacy/transparency. Not only they report their RCT revenues on a monthly basis to shareholders but they also report daily revenues to the casino owner.
In my opinion the one takeaway you should focus on from your DD is not necessarily the monster revenue growth, how business in Macau is booming, the 40% ROC, how profits are being reinvested leading to still higher profits, the insider buys, the expansion of their baccarat table count from 24 to 36, the stupidly low p/e, the terrific transparency of their monthly RCT number release, the growing fund ownership, or the more than $2 in EPS they will report for 2011.
It is this.
THEIR REVENUE IS AUDITED VIRTUALLY EVERY DAY AS THEY REPORT THE DAILY TAKE TO THE CASINOS THEY WORK WITH. MACAU'S GAMING REGULATORS ALSO AUDIT THEIR REVENUE IN ORDER TO ACCESS TAXES.
Simply put, the fraud that has plagued so many Chinese small caps is not an issue to be concerned about with this company. It is too difficult to pull off with the degree of scruntiny their revenue receives from multiple outside parties.
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