The monthly year-on-year growth rate of casino gross gaming revenue (GGR) in Macau is likely to continue accelerating in November, says Sanford C. Bernstein Ltd in Hong Kong. It bases the projection on unofficial industry data.
Estimates issued on Monday by the brokerage forecast that Macau’s November GGR could expand by between 13.9 percent and 15 percent year-on-year.
That would mark the fourth consecutive month of growth rate acceleration since August, when GGR went up by 1.1 percent year-on-year. August was the first time in 27 months that such revenue had not contracted, judged year-on-year.
Year-on-year GGR growth in Macau stood at 7.4 percent in September and at 8.8 percent in October.
The last time Macau posted a year-on-year GGR growth rate of 15 percent or above was in February 2014: at the time, casino gross revenue skyrocketed by 40.3 percent.
“According to our channel checks and our estimates, Macau’s GGR… month-to-date (November 1 to 27) is approximately MOP17 billion [US$2.13 billion],” stated Sanford Bernstein.
“Assuming an average daily rate of MOP580 million to MOP640 million for the remainder of this month, November GGR would be in the range of MOP18.7 billion and MOP18.9 billion,” said analysts Vitaly Umansky, Zhen Gong and Yang Xie in their note.
Sanford Bernstein’s note also provided some colour on the business performance of individual Macau casino operators so far in November. It said: “Our channel checks suggest Wynn [Macau Ltd] gained share in the month, while Melco Crown Entertainment Ltd, MGM [China Holdings Ltd] and Galaxy [Entertainment Group Ltd] all saw some share declines.”
Mr Umansky and his colleagues added: “However, we continue to espouse that the devil is in the details regarding the breakdown between VIP and mass and overall market shares (which are not available); and as such the weight of the overall GGR number needs to be taken with a bit of scepticism.”
Momentum picking up
The latest GGR performance estimate for Macau by brokerage Telsey Advisory Group LLC was not as bullish as Sanford Bernstein’s.
“According to our industry sources, based on gaming play for the first 27 days of November, GGR in Macau for the month is estimated to be tracking +8 percent year-on-year,” said analysts David Katz and Brian Davis.
They added: “Coming off of a strong October, which included solid results during the Golden Week holiday [a seven-day holiday period in mainland China surrounding the country’s National Day] and high-single-digit growth for the month, our sources had expected a softening in November. We are encouraged by the acceleration in the past week’s results, which are incrementally positive for operators in the region on the heels of strong month.”
Christopher Jones of the Buckingham Research Group Inc stated in a Monday note that “momentum continues to pick up in Macau.”
He added: “Increased room capacity, increases in average spend per customer and modestly better demand are all driving performance in the region.”
Two new casino resorts have opened recently in Macau’s Cotai district, pushing up the total number of hotel rooms available in the city: Wynn Macau Ltd’s 1,700-room Wynn Palace and Sands China Ltd’s 3,000-room the Parisian Macao, launched on August 22 and September 13 respectively.
Macau had 36,200 hotel rooms of all categories – including guest houses – as of September 30, a year-on-year increase of 20.7 percent, according to data from the Macao Government Tourism Office.
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”We do not believe that reopening the advance notice nomination deadline [for board directors] is appropriate or justified”
Daniel Boone Wayson
Chairman of the Wynn Resorts board of directors