Macau casino operator Galaxy Entertainment Group Ltd is targeting a “shorter” ramp-up regarding the recent opening and freshly-publicised launch of its Capella at Galaxy Macau hotel (pictured in a file photo) at its flagship Cotai casino resort, compared to the launch in 2023 of its Raffles at Galaxy Macau hotel tower.
So said brokerage Jefferies Hong Kong Ltd citing an earnings call with management, following the Thursday release of the casino firm’s first-quarter results.
Like the Raffles-branded hotel tower before it – which in 2023 went through a period of soft launch to selected Galaxy Entertainment patrons – the new hotel tower housing Capella has gaming, and the new hotel is also having a soft-launch period, according to the gaming group.
Jefferies analysts Anne Ling and Jingjue Pei wrote in a Thursday memo: “Management expects the [Capella] hotel with ultra-high-end 100 villas and suites – to fully open in the next few months.
“The gaming floor (30 tables) is fully open, and F&B [food and beverage] will be ready by the end of the year,” added the brokerage.
The institution also noted: “It [Galaxy Entertainment] is targeting a shorter ramp-up period compared to Raffles.”
It added that Galaxy Entertainment “does not expect much cannibalisation” of its business as a result of the arrival of the new hotel.
Seaport Research Partners stated in a Thursday memo, that Capella could help enhance the “premium positioning” of Galaxy Macau in the city’s market.
Senior analyst Vitaly Umansky said: “With a refocused marketing effort and smart digital tables now up and running, Galaxy is well-positioned to maintain [gross gaming revenue, i.e., GGR] share levels in the mid to low [portion of the] 19 percent range, and potentially grow share above that level.”
Mr Umansky also remarked: “The opening of the Capella luxury resort at Galaxy Macau… further enhances the property’s premium positioning and [can] drive further growth in late 2025 and 2026.”
That was the period before the expected launch of Galaxy Macau Phase 4 in 2027, “which will drive further share expansion,” stated Seaport.
Galaxy Entertainment had a circa 20 percent market share of gaming revenue in April and for the Labour Day Golden Week, the Seaport analyst noted in his memo following the earnings call.
He also noted that Galaxy Entertainment’s “growth pace” in gaming revenue had been “faster” than the overall market during the Golden Week period, with the help of hold, and volume growth.
Macau-wide GGR for the the Labour Day season covering the first five days of May – a holiday on the Chinese mainland – was MOP5.1 billion (US$636.9 million), representing an increase of 12 percent year-on-year, investment analysts suggested in post-holiday memos.
During the festive period, Galaxy Entertainment had seen strong sales in its retail shopping business, said Seaport and Jefferies.
Jefferies additionally noted, citing the latest earnings call: “Management acknowledged the growing concern of the potential weaking on… [consumer] demand in the short term due to macro uncertainties. But based on the current trend, Macau remains resilient.”
On Macau peninsula side, where Galaxy Entertainment runs the StarWorld Hotel and its casino, management will look to bring in “more premium mass” patrons, said Jefferies.
Nonetheless, “productivity per table [at StarWorld] is in line with the market and in line with Galaxy Macau. Mass performance is circa 100,000/table/day,” said Jefferies.
The brokerage also mentioned regarding StarWorld: “The incremental business, which is the electronic gaming… has been trending better.
Once the company added at the property “a non-gaming offering aligned with [the] premium mass [table] segment it will be able to add more tables to improve the property’s performance in the future,” suggested Jefferies, citing commentary from management.
