Brokerage JP Morgan Securities (Asia Pacific) Ltd estimates that Macau’s mass-market gross gaming revenue (GGR) “recovered to about 65 percent of pre-Covid levels” in the first quarter this year, after March GGR “comfortably beat sell- and buy-side estimates”.
That compared with first-quarter revenue in the VIP segment “at 17 percent” of 2019’s level, stated the institution in a Sunday note.
Macau’s headline casino GGR was up 246.9 percent year-on-year in March, to just under MOP12.74 billion (US$1.58 billion). The result was the best monthly performance since January 2020 – prior to the onset of the pandemic alert, according to official data.
March’s result means first-quarter GGR tallied MOP34.64 billion, up 94.9 percent on the prior-year’s quarter, reaching about 45 percent of pre-Covid levels. The tally for the first three months of 2023 accounted for 82.1 percent of aggregate GGR in full-year 2022.
The official breakdown for VIP versus mass-market gambling in the first quarter will be released by the city’s regulator later this month.
According to JP Morgan, most of Macau casino operators – aside from SJM Holdings Ltd – “should be able to generate handsome free cash flow at this level, well above capex/financing costs”.
“March run-rate of MOP411 million a day… should reassure investors of a clear sequential ramp in demand,” wrote analysts DS Kim and Mufan Shi.
“Importantly, March print also implies mass GGR has finally hit 70 percent-plus of pre-Covid levels for the industry … and VIP recovery of circa 18 percent of pre-Covid levels also looks pretty solid for a segment that was once considered completely ‘gone’,” they added.
Moody’s Investors Service Inc said in a note last week it expected Macau’s casino GGR this year to be about 45 percent of 2019’s level, with mass-market GGR likely to “improve to 75 percent” of pre-pandemic times, and fully recover in 2024.
