Baillieu Holst morning note by James Nicolaou: Donaco (DNA) came under pressure yesterday after and article showing Vietnamese people protesting over China`s...

Baillieu Holst morning note by James Nicolaou: Donaco (DNA) came under pressure yesterday after and article showing Vietnamese people protesting over China`s deployment of an oil rig in the South China Sea. DNA's new casino (which opens this weekend) relies totally on Chinese gamblers coming over the border. The company recently raised $75 million at $1.33 with the bulk of the money earmarked for acquisitions. These now look to have been delayed as well as March revenue form the old casino coming in lower than expected. We put a buy recommendation back on the stock at $1.20 and are confident that the company will not remain a one asset play for too long, and that the new casino will deliver good earnings growth. Next week Fund Managers and analysts are going to the new casino which could generate interest especially at current levels.


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