GGRAsia – Macau daily casino GGR solid after CNY: brokerages

Macau daily casino GGR solid after CNY: brokerages

Feb 13, 2023 Newsdesk Latest News, Macau, Top of the deck

JP Morgan Securities (Asia Pacific) Ltd estimates – based on its own checks – Macau casino gross gaming revenue (GGR) for the first 12 days of February stood at MOP4.4 billion (US$544.2 million), implying a run-rate of MOP367 million per day.

“This implies the GGR run-rate remained largely stable week-on-week at around MOP357 million a day last week … which is quite solid if we consider softer seasonality during the lull period” after the Chinese New Year (CNY) holidays, suggested the brokerage in a Monday memo.

“The month-to-date print represents a 40 to 45 percent recovery versus pre-Covid-19 levels … for headline GGR, in turn suggesting mass GGR recovered to 60 to 70 percent of pre-Covid levels,” wrote analyst DS Kim. He said the comparison was with the first two months of 2019, to “neutralise seasonality” associated with variations in when the lunar new year actually occurs.

“February GGR is likely to hit more than MOP9.5 billion – implying MOP350 million a day – comfortably meeting the high bar from the buy side and beating the sell-side models,” added the JP Morgan analyst.

Macau’s January GGR grew by 232.6 percent month-on-month, coinciding with the ending of mainland China and Macau’s respective ‘zero-Covid’ policies at the start of the month that saw a boom in tourism numbers, and the mainland’s Chinese New Year break.

Several Macau casino operators have recently provided colour on gambling trends at the start of the year, mentioning a strong uptick in business after the market returned to pre-pandemic operating conditions.

Morgan Stanley Asia Ltd said in a Sunday note that Macau gaming demand remained “strong” in early February. “Casino traffic and minimum bets stayed strong even post Chinese New Year holidays, which was not typical pre-Covid,” stated the analysts following a trip to Macau at the beginning of the month.

The institution also said that “air capacity” from mainland China to Macau “recovered to 70 percent of pre-Covid levels” in the month-to-date. “This is encouraging for premium mass as most higher-end customers travel by air,” it added.

Morgan Stanley had a more optimistic outlook for Macau’s February GGR, expecting the market to record MOP11.2 billion, supported by the return of package tours on February 6.

Two industry observers said in recent comments to GGRAsia that the return of tour groups from the mainland were expected to help casinos gain more foot traffic in their mass gaming floors.