GGRAsia – DB lowers forecast for Macau 2021 GGR after Dec 2020 data

DB lowers forecast for Macau 2021 GGR after Dec 2020 data

Jan 04, 2021 Newsdesk Latest News, Macau, Top of the deck

A full-year 2021 forecast for Macau gross gaming revenue (GGR) has been revised down marginally by Deutsche Bank Securities Inc, following the publication on Friday of the full-year 2020 and December-GGR numbers from Macau.

The institution now expects 2021 Macau GGR to yield the equivalent of US$26.35 billion, versus its previous projection of US$26.60 billion.

The revised number would – if realised – nonetheless represent a 248-percent year-on-year improvement from the MOP60.44 billion (US$7.57 billion) achieved in 2020.

Carlo Santarelli, an analyst at Deutsche Bank, noted that the December 2020 GGR tally was – at 65.8 percent year-on-year decline, i.e., an aggregate of about US$979 million – below the bank’s own December estimate of just over US$1 billion.

December’s actual GGR nonetheless marked the lowest year-on-year decline in monthly terms since January, a time before the full effects of the Covid-19 pandemic were felt in the local tourism market.

A Monday memo from brokerage Sanford C. Bernstein Ltd observed that Macau’s December GGR was “weaker than initially hoped”.

“The month continued to be negatively impacted by visitation bottlenecks due to visa processing and Covid[-19] test requirements and by weakness in VIP volumes,” wrote analysts Vitaly Umansky, Tianjiao Yu and Kelsey Zhu.

The institution forecast that January GGR will contract year-on-year in the “low- to mid-60s of percent”.

In Monday’s memo, Sanford Bernstein said it estimated Macau casino GGR in full-year 2021 to be at about 80 percent of the 2019 level, when the city generated MOP292.46 billion.

The brokerage said in a November note that it expected growth in Macau casino GGR in 2021 to be led by the mass-market segment, “in particular the premium-mass segment”. “VIP in 2021 (and to a lesser extent some premium mass) will remain largely impacted by concerns around capital control, government crackdown in China tied to online gambling and foreign casinos, and junket health,” it said in that earlier report.