Deutsche Bank AG has reduced its growth forecast for Macau casino revenue in 2014 to 6.5 percent from 8.6 percent.
Analyst Carlo Santarelli thinks VIP and mass-market revenue combined will actually decline 0.9 percent year-on-year in the third quarter, hit by a combination of a continued decline in VIP play and a slowing of the lower volume mass market.
His prediction follows what investment analysts say is a significant slowdown in the year-on-year growth of the mass market in July. That follows two consecutive months of reported double-digit percentage year-on-year decline in VIP revenue.
Telsey Advisory Group in New York estimates from unofficial industry returns that the mass market slowed to 17.3 percent year-on-year expansion in July compared to 26.9 percent in June and 32.5 percent in the whole of the second quarter. It says that even with seasonal factors and other variables that can make month-on-month comparisons challenging, it looks like something has changed.
“While the choppiness in VIP is expected at this point, the bigger disappointment is clearly the deceleration in mass market growth,” said analyst Christopher Jones of Telsey Advisory Group.
“While Telsey Advisory Group had forecasted increased volatility in the mass market growth rate coming out of our trip to Macau in early June, July’s deceleration was even a bit more than we had expected.”
Deutsche Bank analyst Mr Santarelli said in a note he expected all casino revenue in Macau to grow by only 0.3 percent year-on-year in August.
He estimated the mass-market would contribute with 14.5 percent growth in the month, but that VIP would decline by 7.8 percent.
“Our 7.8 percent VIP revenue decline estimate is predicated on a 9.0 percent year-on-year decline in VIP rolling chip volume and the LTM [last 12 months] hold [rate] of 3.12 percent (excluding direct roll),” he said.
Jan 19, 2018Two Macau residents have been arrested by the city’s Judiciary Police (PJ) in connection with a criminal complaint that casino chips with a face value of nearly HKD47.9 million (US$6.1...
Dec 29, 2017It could be 2024 before a casino resort is opened in Japan,...
Dec 27, 2017The year 2017 could prove to have been a turning point in...
Oct 25, 2017The deployment of radio frequency identification (RFID)...
Estimated net worth of Lui Che Woo, founder and chairman of casino operator Galaxy Entertainment Group, according to Forbes’ latest ‘Hong Kong’s 50 Richest People’ list