Banking group Morgan Stanley has doubled its 2025 growth forecast for Macau casino gross gaming revenue (GGR) from 5.0 percent to 10.0 percent. It also tripled its forecast for industry 2025 year-over-year growth in earnings before interest, taxation, depreciation, and amortisation (EBITDA) to 6.0 percent, from 2.0 percent.
Seaport Research Partners has pushed its Macau GGR growth estimate to 9.0 percent year-on-year, from its previous outlook of about 7.0 percent.
In 2024, Macau GGR was just over MOP226.78 billion (US$28.05 billion), according to Macau government data.
Morgan Stanley’s updated GGR outlook in a Monday note came after Macau reported on Friday its best post-pandemic monthly GGR, at MOP22.13 billion, a figure up 19.0 percent year-on-year. June’s GGR expanded also by 19 percent.
Morgan Stanley stated: “Two consecutive monthly beats (GGR +19 percent year-on-year) leads to our full-year GGR growth forecast rising to 10 percent year-on-year.”
The institution added the trading environment contributed to “notable positive operating leverage”.
Morgan Stanley stated: “The primary driver for the uptick is higher visitation (+25 percent year-on-year in second-quarter 2025 from the mainland) owing to easier visa issuance (multi-entry visa for Shenzhen and Zhuhai, more Individual Visit Scheme cities added).”
Other factors were, it said: “Increases in concerts featuring popular Asian performers, and a higher number of junkets. Macau has also benefitted from reductions in mainland and Hong Kong visitors to Thailand and Japan lately, and renminbi strength has helped as well.”
Morgan Stanley’s 2025 Macau GGR estimate now stands at MOP248.96 billion, with an average daily rate of about MOP682 million.
Vitaly Umansky, senior analyst at Seaport Research Partners, said in a Sunday memo that Macau’s July GGR result “blows out expectations again”. Seaport expects August GGR to rise 14.8 percent year-on-year.
“Reacceleration of GGR growth is solidifying – we raise our 2025 GGR growth forecast to 9 percent” from 7 percent year-on-year, the institution stated.
Mr Umansky observed: “China economy improvement – especially the upper middle-class consumer – is key to driving upward growth in Macau.”
He added: “While escalation of U.S. tariffs remains an overhang, we expect a trade deal to occur between the U.S. and China which will shore up China consumer confidence and improve spend.
“Improving consumer confidence – especially in the upper middle class and high net worth individuals – should help support Macau GGR growth.”
Stephen Pizzella, of Deutsche Bank Securities Inc, said in a Friday note that Macau’s July GGR tally “represents a 5.0 percent sequential improvement (+1.6 percent per day), relative to June”.
Deutsche Bank added that July’s 19.0 percent year-on-year monthly increase “compared to recent checks in the range of +12 percent to +16 percent year-on-year”.
For its part, Morgan Stanley observed its own forecast for Macau-wide EBITDA was “above consensus by 1 percent… but expect further consensus increases and re-rating for stocks”.
The banking institution nonetheless stated that “lessons” from Macau’s second-quarter earnings season “thus far,” included that player-related “reinvestment costs as a percentage of mass [business] are not declining yet, and that mass- market share gainers” such as Sands China Ltd and MGM China Holdings Ltd, “suggest second-quarter mass growth” market-wide “may be higher than anticipated” and that Wynn Macau Ltd /SJM Holdings Ltd “lost share”.
