GGRAsia – Macau daily CNY GGR likely a 4 year high: analysts

Macau daily CNY GGR likely a 4 year high: analysts

Feb 19, 2024 Newsdesk Latest News, Macau, Top of the deck

The Macau casino market’s daily run-rate for gross gaming revenue (GGR) for part of Chinese New Year (CNY) “likely hit the MOP1 billion-plus [US$124.1-million] mark for the first time in over four years,” said JP Morgan Securities (Asia Pacific) Ltd in a Monday note.

“An apples-to-apples comparison is challenging as the print covers both lunar new year and pre-holiday lull periods,” observed analysts DS Kim, Mufan Shi and Selina Li

Though they added: “Our back-of-the-envelope calculation… suggests daily GGR for the peak lunar new year holidays” on day four to day seven, “likely hit the MOP1 billion-plus mark for the first time in over four years, coming in above MOP900-million-plus run-rates during last Golden Week in October.”

That was a reference to a previous Chinese holiday peak encompassing the country’s National Day on October 1.

Citigroup said in Monday memo that daily GGR estimate for the Chinese New Year period was “largely in line” with its estimate. The institution had said in a February 1 memo it anticipated that after a pre Chinese New Year lull, Macau GGR would “reaccelerate to around MOP900 million per day from February 12 to February 17, the last six days” of the latest holiday period.

“Based on industry sources, VIP volumes were circa 10 percent to 14 percent higher month-on-month, while mass volumes were about 8 percent to 10 percent higher month-on-month,” stated Citigroup. “VIP hold rate appears to be below normal level,” it added.

JP Morgan stated in its post-holiday update: “We think the print implies mass GGR recovered to 120-percent-plus of 2019 lunar new year’s, about 10 percentage points higher than the pace of recovery in recent months.” That was a reference to the trading year prior to the Covid-19 pandemic.

The two institutions said that based on their checks, GGR for the first 18 days of February was MOP12.5 billion, or MOP694 million per day. That represented “a circa 75 percent recovery versus the comparable period in 2019,” observed JP Morgan.

JP Morgan added it expected full-February GGR to rise 80-percent-plus year-on-year, to circa MOP19 billion, which would be “the highest run-rate (MOP650-million per day-plus) in over four years – versus MOP629 million per day in October – which in turn should drive first-quarter GGR to grow mid/high-single digits” sequentially, versus the brokerage’s prior estimate of 4 percent growth quarter-on-quarter.

Citigroup said it was “conservatively” keeping its February GGR forecast “unchanged at MOP19.5 billion”, circa 77 percent of February 2019.