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Steve Wynn: We're seeing a 'resurgence' in China

  • "We're enjoying a resurgence of activity at the top end in China," Steve Wynn says.
  • Gaming net revenue in Macau was $587 million last quarter, higher than the $500.9 million expected on Wall Street.
  • Negative effects of a corruption crackdown in China are passing, Wynn says.
Wynn Resorts Chairman and CEO Steve Wynn
Ethan Miller | Getty Images
Wynn Resorts Chairman and CEO Steve Wynn

Wynn Resorts shares closed up almost 6 percent Wednesday, a day after the casino operator reported strong earnings, which CEO Steve Wynn attributed to the return of growth in the Chinese market.

"We're enjoying a resurgence of activity at the top end in China," Wynn said on a conference call following the report Tuesday, according to a transcript. "People are settling back into routines that they're comfortable with, and that includes, you know, going to Macau and buying a new car or shopping at Louis Vuitton."

The company's first quarter earnings came in at $1.24 per share, outperforming Wall Street's expectation of 93 cents per share, according to Thomson Reuters. Gaming net revenue in Macau was $587 million, higher than the $500.9 million expected on Wall Street.

The shares are now up more than 44 percent this year.

One of the headwinds the company had been facing was a Chinese crackdown on corruption, which led many wealthy people in the country to pass on luxury goods and services to avoid arousing suspicion. As a result, Wynn said during the earnings call that the crackdown "had secondary effects on high-end products like shopping and automobiles, and gaming was part of that."

But he thinks the issue has mostly subsided, and that explains why he sees growth in the Chinese market.

Wynn sees the outlook for the company's Macau branch as only improving. Because of the limited real estate and restrictive permitting, Wynn says that once a few ongoing projects are completed, the gaming industry won't have any new competitors to worry about.

"The new tower that the rooms that were added at the City of Dreams is coming into season and then that's it, the door sort of closes on more supply," he said on the call. "And then we're just left with the enormous demand of China."