• About Us
  • The Team
  • Advertise with Us

The latest news on the gaming industry in Asia

() () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () ()
  • Home
  • Macau
  • Philippines
  • Singapore
  • Japan
  • Rest of Asia
  • World
  • Industry Talk
  • Trends & Tech
  • iGaming
  • follow
    • Facebook
    • Twitter
    • RSS Feed
    • LinkedIn

Investors need patience on Macau entry: Macquarie

Jan 06, 2016 Newsdesk Latest News, Macau, Top of the deck  


Investors need patience on Macau entry: Macquarie

Many investors want to “bottom fish” Macau gaming stocks – despite the negative outlook on the city’s casino industry for 2016 from a range of analysts – says a report from Macquarie Capital Securities Ltd, issued on Monday.

The report said reasons for some investors’ interest in entering the market for Macau names included: a 54 percent to 76 percent decline in share prices in the last two years; and “mass market gross gaming revenue (GGR) [that] has shown some early signs of stabilisation at MOP7.0 billion [US$876.7 million] to MOP7.9 billion per month”.

Union Gaming Securities Asia Ltd had said in a note on January 1 that it expected Macau mass market gambling would continue to outperform the VIP segment during 2016, in terms of “having already demonstrated stabilisation over the last two quarters”.

Macquarie advised long-term investors to “be patient and wait for better entry opportunities in [the] second half 2016”.

It stated: “…wait for [stock] multiples to further de-rate,” adding this could create “tactical trading opportunities”.

The bank said key catalysts going into the second half of the year were likely to include sequential growth in Macau GGR in May and October, months coinciding with major holidays in China: Labour Day and National Day respectively.

Macquarie added investors should consider other potential market influences for 2016 such as the expected opening on June 25 of Wynn Palace – a US$4.1-billion Cotai property from Wynn Macau Ltd – and Macau government regulatory changes related to a possible full smoking ban in casinos.

Other market influences for investors to consider included regional competition for Asian tourist dollars from “the openings of Shanghai Disneyland, Genting Malaysia Tower 2A remaining phases, Naga2 in Cambodia and Grand Mariana in Saipan”.

Those were references respectively to: Shanghai Disney Resort, a new non-gaming theme park in China due to launch this year; the redevelopment plan of Resorts World Genting, Malaysia’s only casino resort; an extension to the NagaWorld casino resort in Cambodia’s capital Phnom Penh; and a casino resort in the U.S. Commonwealth of the Northern Mariana Islands.

Maybank IB Research said in a note in July that the MYR4-billion (US$914.1-million) Phase 1 of the Genting Integrated Tourism Plan – a revamp scheme for Resorts World Genting, a property operated by Genting Malaysia Bhd – “should be fully completed by end-2016”. A note from CIMB Securities Ltd in October – quoting Genting Malaysia – said the opening of a 20th Century Fox-branded theme park at the resort would be delayed until 2017.

Macquarie analysts Kai Tan, Maggie Jiang and Jensen Hui noted in their Macau outlook report: “We expect Macau GGR will enter a third year of decline (-13 percent) in calendar year 2016 and flat growth in calendar year 2017 before a low-single-digit L-shaped recovery in calendar year 2018. We continue to believe that Macau GGR has gone ex-growth in the next four years, while there are still some bullish investors expecting a V-shaped recovery.”

Macau’s accumulated casino GGR for the full year of 2015 fell 34.3 percent compared to 2014, according to data released on January 1 by the city’s regulator, the Gaming Inspection and Coordination Bureau. In 2014, Macau’s casino GGR had fallen 2.6 percent.

Mixed bag on policy

The Macquarie team described Macau policy events in 2016 as likely to be “a mixed bag”

“We expect a positive policy bias towards the diversification of the Macau economy in the long term (five years or plus). We expect further tightening policies to clamp down [on] money laundering, which is more relevant to Macau GGR performance in the near term,” the institution’s team noted.

Macquarie added that new supply in the Asia Pacific market – relative to demand – would “remain challenging in the next two years”.

“We expect Wynn Palace, [the] Parisian Macao, MGM Cotai and Lisboa Palace will bring in 1,000 new tables, 7,500 new slot machines and 8,300 new rooms in calendar years 2016 and 2017,” it noted, referring to Wynn Macau’s new Cotai project, and those respectively of Macau operators Sands China Ltd; MGM China Holdings Ltd; and SJM Holdings Ltd.

“We expect the major new casinos [or extensions to existing properties] in Malaysia, Cambodia, Vietnam, [South] Korea and Philippines will at least bring in 1,300 new tables, 7,238 new slot machines and 6,070 new rooms in calendar years 2016 to 2017,” said Macquarie.

The bank added it expected SJM Holdings – a firm founded by former Macau gaming monopolist Stanley Ho Hung Sun – would in 2016 slip into third place in Macau’s unofficial league table for share of market GGR.

“We expect Sands China to maintain its market leader position in calendar year 2016 with 23 percent market share, while we expect Galaxy Entertainment [Group Ltd] (21 percent) will exceed SJM [Holdings] (20 percent),” said Macquarie.


  • tweet
Related articles
  • LVS amends US$1.5bln loan facility, dividends restricted
    LVS amends US$1.5bln loan facility,...

    Feb 01, 2023  

  • Gaming-related crime in Macau down 30pct in 2022: police
    Gaming-related crime in Macau down...

    Feb 01, 2023  

More news
  • Macau ops track earlier recovery after Jan GGR: analyst
    Macau ops track earlier recovery after...

    Feb 01, 2023  

  • Prominent locals speak in court for Tak Chun boss Levo Chan
    Prominent locals speak in court for Tak...

    Feb 01, 2023  


Latest News

Macau ops track earlier recovery after Jan GGR: analyst

Macau ops track earlier recovery after Jan GGR: analyst

Feb 01, 2023  

Most of Macau’s casino operators are likely to generate positive free cash flow in the first quarter, given the robust recovery level of mass-market gross gaming revenue (GGR) in January, relative...
Read More
Prominent locals speak in court for Tak Chun boss Levo Chan

Prominent locals speak in court for Tak Chun boss Levo Chan

Feb 01, 2023  

January travel lift, CNY sees Macau GGR up 233pct m-o-m

January travel lift, CNY sees Macau GGR up 233pct m-o-m

Feb 01, 2023  

Sign up to our FREE Newsletter

UB8V5.qr.16(Click here for more)

Pick of the Day

”Momentum is expected to grow as mainland China recently reopened its borders, and this presents a substantial growth potential for us as historically a large portion of our clientele came from China”

Porntat Amatavivadhana

Non-executive chairman of Donaco International



Most Popular

  • Available Macau casino tables busy at tail of CNY holsAvailable Macau casino tables busy at tail of CNY hols January 27, 2023
  • Almost half million visitors to Macau for 7 days of CNY holsAlmost half million visitors to Macau for 7 days of CNY hols January 30, 2023
  • Macau visitor momentum kept for post CNY weekendMacau visitor momentum kept for post CNY weekend January 30, 2023
  • Macau CNY mass GGR maybe 60pct plus of CNY 2019: JPMMacau CNY mass GGR maybe 60pct plus of CNY 2019: JPM January 31, 2023
Copyright 2014-2023 TEAM Publishing and Consultancy Ltd / All rights reserved
  • Code of Ethics
  • Privacy Policy
  • Useful Links
  • Contact Us