The monthly year-on-year growth rate of casino gross gaming revenue (GGR) in Macau is likely to continue above 10 percent in December, say several investment analysts. That would mark the second consecutive month of double-digit growth, something unseen in Macau since 2014.
Casino GGR was approximately MOP18.79 billion (US$2.35 billion) in November, representing a 14.4-percent increase on the prior-year period. The last time there had been double-digit-percentage growth year-on-year in monthly GGR was April 2014, prior to the local industry’s downturn.
According to the latest analyst notes, December is also poised to mark the fifth consecutive month of GGR growth since August, when GGR went up by 1.1 percent year-on-year. August was the first time in 27 months that such revenue had not contracted, judged year-on-year.
Brokerage Sanford C. Bernstein Ltd said in a note on Monday it forecast December GGR would be in the range of MOP20.6 billion to MOP21 billion, based on unofficial industry data for the first 11 days of the month. “This would represent a year-on-year increase of +12 percent to +14 percent,” wrote analysts Vitaly Umansky, Zhen Gong and Yang Xie.
The brokerage said its own channel checks indicated that Macau’s casino GGR in the first 11 days of December was about MOP7.55 billion, “implying an average daily rate of [circa] MOP686 million”.
Wells Fargo Securities LLC put out a similar forecast also on Monday: “Based on checks through December 11 we estimate December Macau gaming revenues +9 percent to +14 percent year-on-year,” analyst Cameron McKnight said. He added: “Our contacts suggest that revenues have benefited from above average VIP hold and that sequential strength is coming from both mass and VIP segment.”
Mr McKnight additionally said that the brokerage’s “contacts have been suggesting that some junkets are seeing 15 percent to 20 percent growth in volumes”.
Telsey Advisory Group LLC also mentioned in a Monday note market indications suggesting “the Macau market has been improving, with particular focus on the sustainability of the recovery in the VIP business.” Telsey analysts David Katz and Brian Davis added that Macau GGR in December was likely to go up by nearly 10 percent in year-on-year terms, based on data provided by industry sources for the first 11 days of the month.
Brokerage Nomura forecast Macau’s GGR could increase by up to 13 percent year-on-year in December. “That might put an end to the series of GGR growth improvements over the past few months, as we saw 1 percent, 7 percent, 9 percent and 14 percent growth in August, September, October and November, respectively,” it stated in a Monday note.
Christopher Jones of the Buckingham Research Group Inc was less bullish than other analysts, forecasting GGR growth in Macau of between 4 percent and 6 percent year-on-year in December. “We are maintaining our fourth quarter GGR outlook, which assumes a 9 percent increase for the quarter, with expectations for mass market GGR to increase in the 11 percent to 12 percent range and for VIP to be flat to -1 percent,” he added in a Monday memo.
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Amount that each Macau casino operator paid for the circa six-month extension of their respective contract