• About Us
  • The Team
  • Advertise with Us

The latest news on the gaming industry in Asia

() () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () ()
  • Home
  • Macau
  • Philippines
  • Singapore
  • Japan
  • Rest of Asia
  • World
  • Industry Talk
  • Trends & Tech
  • iGaming
  • follow
    • Facebook
    • Twitter
    • RSS Feed
    • LinkedIn

Macau recovery story not broken, only delayed: JP Morgan

Jul 20, 2021 Newsdesk Latest News, Macau, Top of the deck  


Macau recovery story not broken, only delayed: JP Morgan

Brokerage J.P. Morgan Securities (Asia Pacific) Ltd says there is still long-term value in Macau casino stocks, although the sector’s recovery is taking longer than previously forecast. The recovery has been negatively impacted by recent Covid-19 cases in mainland China’s Guangdong province, and delays in the establishment of a “travel bubble” with Hong Kong, it stated.

In a note issued on Monday, analysts DS Kim, Derek Choi and Livy Lyu stated that channel checks by the brokerage suggested that a pick-up in demand was already taking shape. “Our checks suggest upbeat summer holidays, with encouraging feedback on the level of player inquiry and booking,” the JP Morgan team wrote.

The analysts added: “We expect gross gaming revenue to resume sequential recovery path in July (+30 percent month-on-month) and print a post-pandemic high in August (+20 percent month-on-month), helping investors to regain confidence before the all-important October Golden Week”.

The latter was a reference to a holiday period encompassing China’s National Day on October 1. This is traditionally a peak season for Macau’s tourism and casino industries as hundreds of thousands of mainland Chinese tourists take advantage of the weeklong break to visit the city.

China’s State Council declared October 1 to October 7 as this year’s National Day holiday period on mainland China.

In their Monday memo, the JP Morgan analysts said they expected a “travel bubble” between Macau, Hong Kong and Guangdong could be launched by September, “on a limited scale at first”, subject to Covid-19 vaccination rates in each of the regions and absence of new clusters of local infections.

The mainland is currently the only place that has a largely-quarantine free travel bubble with Macau. Authorities in Macau and Hong Kong have mentioned plans to ease Covid-19-related travel restrictions between the two cities, but no schedule has so far been put forward.

According to JP Morgan, a travel bubble covering Macau, Hong and Guangdong would be “an important step” toward further travel easing within Greater China, including the return of electronic issuance of exit permits for mainland Chinese to travel to Macau.

“We’d expect each [travel easing] step to have a few weeks of gap, hoping to see border/visa largely normalised by end-2021/early-2022,” said the JP Morgan team. “Looking at the bright side, this means we may have positive headlines every few weeks into fourth quarter, which could keep the [investor] sentiment afloat.”

Mass at pre-pandemic levels by 3Q2022

The analysts wrote in Monday’s memo that they were “disappointed” by “sluggish re-opening” so far of travel channels to Macau. Even so, the JP Morgan team said the Macau casino industry’s investment thesis was “not broken, only delayed by a few months.”

According to the brokerage, the strong performance of mass gaming and non-gaming during the five-day break encompassing the Labour Day holiday on May 1, showed that “end-demand is intact” for these segments.

In addition, average daily GGR had also been displaying an overall upward trend for several months, only stopped by the temporary increase in boundary controls between Guangdong and Macau due to the emergence of several new local Covid-19 cases in the mainland province in late May and June.

“GGR snapped back onto recovery course as soon as borders normalised in early July, with weekly run-rate back at May levels,” noted the analysts.

The brokerage said it expected mass GGR to grow on average 20 percent quarter-on-quarter in the next four quarters, before reaching pre-pandemic levels – i.e., 2019 figures – by third quarter 2022.

“We continue to think VIP is structurally impaired and can never go back to previous levels, modelling only 35 percent to 40 percent recovery by 2022,” the JP Morgan team added.


  • tweet
Related articles
  • Macau gaming tax revenue US$1.3bln for Jan-Apr period
    Macau gaming tax revenue US$1.3bln for...

    May 19, 2022  

  • Macau repeat visitors denied visa by China says Bernstein
    Macau repeat visitors denied visa by...

    May 16, 2022  

More news
  • Andrew Lo takes controlling stake in Suncity, Summit Ascent
    Andrew Lo takes controlling stake in...

    May 19, 2022  

  • Okada Manila chair Manuel Lazaro dies aged 87
    Okada Manila chair Manuel Lazaro dies...

    May 19, 2022  


Latest News

Andrew Lo takes controlling stake in Suncity, Summit Ascent

Andrew Lo takes controlling stake in Suncity, Summit Ascent

May 19, 2022  

Andrew Lo Kai Bong (pictured), a senior executive at Hong Kong-listed casino investor Suncity Group Holdings Ltd, acquired controlling shares in the firm with effect from May 13, according to...
Read More
Okada Manila chair Manuel Lazaro dies aged 87

Okada Manila chair Manuel Lazaro dies aged 87

May 19, 2022  

Bloomberry plans 3rd Philippine casino, coastal near Manila

Bloomberry plans 3rd Philippine casino, coastal near Manila

May 19, 2022  

Sign up to our FREE Newsletter

UB8V5.qr.16(Click here for more)

Pick of the Day


US$403.9 million

Interim normalised profit after tax and amortisation reported by slot machine maker and online gaming content provider Aristocrat Leisure



Most Popular

  • Wynn CEO, Macau execs in base pay cut in return for sharesWynn CEO, Macau execs in base pay cut in return for shares May 17, 2022
  • Macau repeat visitors denied visa by China says BernsteinMacau repeat visitors denied visa by China says Bernstein May 16, 2022
  • U.S. says Steve Wynn ‘foreign agent’, lobbied for ChinaU.S. says Steve Wynn ‘foreign agent’, lobbied for China May 18, 2022
  • Alleged bribe offer to ex-Wynn manager probed by HK, MacauAlleged bribe offer to ex-Wynn manager probed by HK, Macau May 17, 2022
Copyright 2014-2022 TEAM Publishing and Consultancy Ltd / All rights reserved
  • Code of Ethics
  • Privacy Policy
  • Useful Links
  • Contact Us