GGRAsia – Macau premium mass GGR at 110pct pre-Covid: JP Morgan

Macau premium mass GGR at 110pct pre-Covid: JP Morgan

Sep 04, 2023 Newsdesk Latest News, Macau, Top of the deck

Premium mass gross gaming revenue (GGR) volume in Macau has already surpassed the levels recorded in 2019, the last trading period before the onset of the Covid-19 pandemic. That is according to a memo by brokerage JP Morgan Securities (Asia Pacific) Ltd, following the official announcement by the Macau regulator of the city’s industry wide overall GGR figure for August.

The MOP17.21-nillion (US$2.13 billion) August aggregate – up by 3.3 percent month-on-month – was “another post-pandemic high”, “recovering to 71 percent of pre-Covid-19 levels,” said analysts DS Kim, Mufan Shi and Selina Li in a Friday memo.

They added the data implied a daily run-rate of MOP555 million in August. That compared with a daily run-rate of MOP500 million in the second quarter of this year, and a daily run-rate of MOP537 million in July.

“The print suggests mass GGR recovered to 93 percent to 94 percent of pre-Covid-19 levels versus high-80s [of percent] in the second quarter or low-90s [of percent] in July,” said JP Morgan.

According to the brokerage’s estimates, the August mass GGR recovery was helped by a “110-percent recovery in premium mass” as compared with pre-Covid-19 trading levels. The recovery rate for base mass for last month stood at 75 percent to 80 percent pf pre-Covid-19 levels, it added.

JP Morgan also pointed out that VIP GGR in August “edged up to 28 percent to 29 percent” of pre-Covid-19 levels. That was an improvement from the 23 percent to 24 percent recovery rate for VIP GGR in the second quarter.

In their Friday memo, the JP Morgan analysts curbed expectations for GGR in Macau for the current month.

They stated: “September GGR isn’t going to wow anyone, not only due to seasonality – a shoulder season between summer holiday and October Golden Week –, but also due to super Typhoon Saola this weekend.”

China’s State Council has designated September 29 to October 6 inclusive as the holiday period known as October Golden Week. The period encompasses the lunar-calendar based Mid-Autumn Festival, falling on September 29 this year, and China’s National Day on October 1.

Traditionally those holiday seasons are times of peak demand for Macau’s casinos and general tourism facilities, but JP Morgan admitted in its latest memo that the performance of the gaming sector during the October Golden Week was hard to predict.

“We know that all the [hotel] rooms at Macau casinos will be sold out, as has been the case historically, but the question always is ‘who’ will be staying there and ‘how much’ they’ll play (and lose),” JP Morgan said.