The Macau casino market’s “robust recovery” has continued, “with or without” a regional holiday period being involved, says a Wednesday note from JP Morgan Securities (Asia Pacific) Ltd, commenting on February’s gross gaming revenue (GGR) performance relative to January.
Macau’s February GGR was down 10.8 percent judged month-on-month, at MOP10.32 billion (US$1.28 billion), according to data released on Wednesday by the city’s casino regulator, the Gaming Inspection and Coordination Bureau. The February result was nonetheless up 33.1 percent year-on-year.
The January GGR performance had included the Chinese New Year (CNY) festive period towards the end of the month. From January 8, Covid-19 related travel restrictions involving the Chinese mainland, Macau and Hong Kong, were eased, coinciding with greatly-increased visitor volume to Macau.
JP Morgan analysts DS Kim and Mufan Shi observed in their Wednesday memo that the February GGR result “implies a daily run-rate of MOP369 million, which is in line with the January rate (MOP374 million per day),” even without January’s Chinese New Year holiday. That would mean only a 1.3 percent decline in the daily average GGR for February relative to January, though February this year had three fewer days than the preceding month.
Nonetheless the February data “should, in our view, negate the bears’ argument that the strong January beat was just a ‘one week wonder’ from the lunar new year boost, and help the market gain confidence in the sustainability of the recovery,” added the analysts.
The February result represented a “44 percent recovery” relative to the pre-pandemic trading period of February 2019, despite what the brokerage termed “the demise of junket VIPs” as a business segment.
The February tally implied mass-market GGR and VIP GGR “rebounded” to respectively circa 65 percent and 15 percent of pre-Covid levels, according to the brokerage.
The JP Morgan team stated, “this is encouraging, in that the pace of mass recovery thus far is comparable to other jurisdictions,” mentioning Singapore, Las Vegas, Nevada in the United States, and South Korea.
Citing its own research and opinion, the brokerage suggested the VIP segment “shows signs of recovery” with business from so-called ‘direct’ or house-managed VIP patrons – traditionally considered by industry commentators a modest portion of the market relative to junket-generated play in pre-pandemic times – “already recovered to well above pre-Covid levels, thanks to conversion of junket patrons”.
