• About Us
  • The Team
  • Advertise with Us

The latest news on the gaming industry in Asia

() () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () ()
  • Home
  • Macau
  • Philippines
  • Singapore
  • Japan
  • Rest of Asia
  • World
  • Features
  • Industry Talk
  • Trends & Tech
  • follow
    • Facebook
    • Twitter
    • RSS Feed
    • LinkedIn

Morgan Stanley forecasts 2-pct drop in Macau GGR this year

Jan 07, 2019 Newsdesk Latest News, Macau, Top of the deck  


Morgan Stanley forecasts 2-pct drop in Macau GGR this year

Morgan Stanley is forecasting that overall gross gaming revenue in Macau casinos will shrink by 2 percent this year. A note issued on Sunday by the stockbroking arm of the investment bank says its analysts think the earnings of Macau casino operators may decline in the first quarter.

“The negative revisions mean more downside to stocks despite cheap valuations,” said the note written by Praveen Choudhary, Jeremy An and Thomas Allen.

The Macau gaming shares preferred by Morgan Stanley are those of MGM China Holdings Ltd and Melco Resorts and Entertainment Ltd.

“While Macau is a structural growth story driven by low penetration and improving infrastructure, we see the cyclical slowdown continuing in 2019,” the note said. “We change our industry view to ‘in-line’ from ‘attractive’ due to tightened liquidity, [the] full smoking ban pressuring VIP and premium mass growth in 2019, and potential decline in earnings before interest, tax, depreciation and amortisation year-on-year growth in the first quarter of 2019.”

A revised bill on smoking that bans tableside tobacco use in VIP rooms – the only places in the Macau casino context that were still allowing smoking at the gaming table – came into effect on January 1. A December report on the casino sector outlook for Macau from brokerage Sanford C. Bernstein Ltd said the new smoking rules were “likely a headwind for the industry”.

“We now expect 2019 GGR growth of minus 2 percent (was 5 percent), driven by negative VIP growth of minus 6 percent (was 0 percent) and slower mass growth of 2 percent (was 9 percent),” the Morgan Stanley team stated in its Sunday report, making reference to its previous estimates for the Macau market. “Licence renewal remains a key overhang, and could keep valuation multiples lower than long-term averages.”

The stockbroking arm of the investment bank added: “The first quarter of 2019 could see negative EBITDA growth year on year due to high base, higher opex and a smoking ban on premium mass and VIP areas.”

Morgan Stanley expects MGM China to increase its share of the market in Macau because of its MGM Cotai casino resort, and Melco Resorts to increase its share because of its Morpheus casino resort. Both properties were launched in 2018.

Macau’s casino GGR grew by 14 percent last year compared to 2017, according to the Gaming Inspection and Coordination Bureau. Last year’s accumulated GGR was about MOP302.85 billion (US$37.57 billion), compared to MOP265.74 billion the previous year. Most analysts have suggested this year’s GGR growth rate will be reduced, possibly to a figure less than 10 percentage points.


  • tweet
Related articles
  • Pansy Ho again cuts stake in MGM Resorts, for US$57mln
    Pansy Ho again cuts stake in MGM...

    Mar 04, 2021  

  • Macau casino GGR down 9pct m-o-m in February: govt
    Macau casino GGR down 9pct m-o-m in...

    Mar 01, 2021  

More news
  • NagaWorld pause a negative for NagaCorp credit: Moody’s
    NagaWorld pause a negative for NagaCorp...

    Mar 05, 2021  

  • Casino firm Landing flags 10pct-20pct slimmer year loss
    Casino firm Landing flags 10pct-20pct...

    Mar 05, 2021  


Latest News

NagaWorld pause a negative for NagaCorp credit: Moody’s

NagaWorld pause a negative for NagaCorp credit: Moody’s

Mar 05, 2021  

The temporary suspension of business at Cambodian casino resort NagaWorld, after 11 staff tested positive for Covid-19, is a “credit negative” for its Hong Kong-listed promoter NagaCorp Ltd, said...
Read More
Casino firm Landing flags 10pct-20pct slimmer year loss

Casino firm Landing flags 10pct-20pct slimmer year loss

Mar 05, 2021  

Sands China to pay US$2.4mln tax re Gondola Ride: court

Sands China to pay US$2.4mln tax re Gondola Ride: court

Mar 04, 2021  

Sign up to our FREE Newsletter

UB8V5.qr.16(Click here for more)

Partners

Pick of the Day

“Prolonged closure of operations could derail earnings recovery and weigh on NagaCorp’s credit quality"

Junling Tan, Yu Sheng Tay and Vikas Halan

Analysts at credit rating agency Moody’s Investors Service



Most Popular

  • Lim Kok Thay, GEN Singapore execs in US$1.3mln stock awardLim Kok Thay, GEN Singapore execs in US$1.3mln stock award March 2, 2021
  • Las Vegas Sands to sell off Nevada assets for US$6.25blnLas Vegas Sands to sell off Nevada assets for US$6.25bln March 3, 2021
  • Covid-19 test cert no longer needed for Macau casino entryCovid-19 test cert no longer needed for Macau casino entry March 2, 2021
  • Galaxy Macau to add Raffles-branded hotel towerGalaxy Macau to add Raffles-branded hotel tower March 1, 2021
  • Macau casino GGR down 9pct m-o-m in February: govtMacau casino GGR down 9pct m-o-m in February: govt March 1, 2021
Copyright 2014-2021 TEAM Publishing and Consultancy Ltd / All rights reserved
  • Code of Ethics
  • Privacy Policy
  • Useful Links
  • Contact Us