Analysts have reduced their outlook for June gross gaming revenue (GGR) in Macau as VIP remains soft and the total daily run rate for gaming revenue keeps falling. Macau‘s average daily “table win run rate” last week fell further to about MOP795 million (US$99.6 million), down from MOP824 million in the previous week, Nomura said in a note on Monday.
“We believe mass trends remained strong during the week, while VIP saw continued soft roll. We expect VIP will remain choppy for the next two to three months,” Nomura analysts Louise Cheung and Harry Curtis wrote in the note.
The Japanese brokerage said that assuming a daily table win range of MOP800 million to MOP875 million for the rest of the month, June GGR could be between MOP26.7 billion and MOP27.5 billion, down 3 percent to 5 percent year-on-year. GGR in June 2013 was MOP28.3 billion.
“We estimate June 2014 mass revenues could be up 32-36 percent year-on-year. VIP revenues could be down 20-23 percent year-on-year, with VIP win rate up against a tough comp,” the firm said.
U.S.-based brokerage firm Sterne Agee also lowered its June GGR outlook for Macau’s casinos to between a drop of 2 percent and 6 percent. That’s down from a previous range of a drop of 2 percent and growth of 3 percent.
Nomura said it sees limited downside on the Macau casino stocks, although there is not much of an upside either. The firm said any potential rally might not occur until late this year, given the lack of near-term catalysts.
“Current VIP trend imply flattish growth for the year, and assuming mass growth of 25-30 percent, 2014F GGR could be closer to 9-10 percent growth,” Nomura analysts said.
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