GGRAsia – Deutsche Bank ups Macau 2023 GGR forecast after Feb data

Deutsche Bank ups Macau 2023 GGR forecast after Feb data

Mar 02, 2023 Newsdesk Latest News, Macau, Top of the deck

Deutsche Bank Securities Inc has upped its estimate for Macau’s 2023 casino gross gaming revenue (GGR) by US$690.1 million, or 3.3 percent, relative to a forecast it issued in November, a period prior to easing of Covid-related travel restrictions for mainland China, Macau, and Hong Kong.

“Post release of February GGR, as well as the recent releases of visitation and hotel room supply and occupancy data for January, we have updated our databases,” said analyst Carlo Santarelli in a Wednesday note after the announcement of Macau’s February GGR.

February GGR fell by 10.8 percent month-on-month, to MOP10.32 billion (US$1.28 billion) but was up 33.1 percent year-on-year.

Deutsche Bank now expects the 2023 GGR tally to be the equivalent of just over US$20.6 billion. Its 2023 forecast as issued in November had been for above US$19.9 billion.

Deutsche Bank’s revised estimate is about 28 percent higher than the Macau government’s own forecast of MOP130 billion (nearly US$16.1 billion) for 2023.

The aggregate Macau GGR for the first two months of this year, stands at MOP21.90 billion, which is already 51.9 percent of the just-under MOP42.20 billion achieved for the whole of 2022.

JP Morgan Securities (Asia Pacific) Ltd said in a Wednesday memo that January’s momentum had been maintained in February, “with or without” a regional holiday period being involved.

Following the removal of travel restrictions on January 8, Macau GGR that month surpassed the gaming revenue tally in Las Vegas, Nevada, in the United States.

January gaming win in Nevada as a whole, stood at US$1.27 billion, with that for Las Vegas Strip at US$713.2 million, according to data from the Nevada Gaming Control Board published on Tuesday. That compared to the equivalent of US$1.43 billion in Macau, showed official data.

A Wednesday note from CBRE Securities LLC after publication of Macau’s February GGR data suggested that a full-year 2023 outlook previously provided by the Macau government “seems conservative”.

Analysts John DeCree and Max Marsh said that applied even to a “Bloomberg consensus survey for 2023” that indicated US$18 billion of GGR, which would represent a circa “50 percent recovery in GGR relative to 2019”.

The CBRE team added referring to the evolving structure of the Macau gaming market: “Considering the mix shift to mass and premium mass – from VIP – we expect continued margin expansion as revenue recovers, likely putting the EBITDA [earnings before interest, taxation, depreciation and amortisation] recovery ahead of the revenue recovery in 2023 and beyond.”

In other analysis, Deutsch Bank gave an estimate for GGR market share for January among Macau’s six operators.

It put Sands China Ltd on 26.5 percent; Galaxy Entertainment Group Ltd on 19.5 percent; and MGM China Holdings Ltd in third place, with 16.5 percent. Melco Resorts and Entertainment Ltd had a 14.0-percent share; Wynn Macau Ltd with 13.5 percent; and SJM Holdings Ltd on 10.0 percent.