Macau casino operators MGM China Holdings Ltd and Melco Resorts and Entertainment Ltd “continue to gain share” in VIP gambling business in the city so far this month, suggests a Monday note from Japanese brokerage Nomura.
“Based on our latest operator checks, we do not believe that all Macau operators have been negatively impacted by low VIP volumes/hold in March. We believe buy-rated MGM [China] and Melco [Resorts] continue to gain share,” wrote analysts Harry Curtis, Daniel Adam and Brian Dobson.
Nonetheless the institution thought that market-wide, a softening of average daily VIP gambling volume so far in March compared to February – down by as much as 17 percent to 19 percent – was likely to contribute to a decline in Macau’s March casino gross gambling revenue (GGR) of between 3 percent and 5 percent year-on-year.
GGR is a different way of measuring industry performance as compared to VIP volume – the latter is also sometimes referred to as rolling chip volume.
“Assuming GGR per day settles at approximately MOP800 million [US$99 million] to MOP850 million for the final week of the month, we estimate March GGR will be down around 3 percent to 5 percent year-on-year,” stated Nomura.
Brokerage Sanford C. Bernstein Ltd said in a Monday memo that its “channel checks” indicated Macau’s average daily GGR for March so far this month was MOP795 million, down 12 percent compared to February’s MOP906-million average, and down 1 percent compared with January’s MOP805-million daily average.
The institution added that so far in March, average daily GGR was down 5 percent year-on-year on the MOP837 million average per day in March 2018, although the firm’s analysts said large-scale events by junkets for their customers this time last year, had held “elevated” VIP GGR in March 2018.
“As a result of weaker than expected trend in March, we are lowering our March estimated GGR growth to -6 percent to -5 percent year-on-year,” wrote analysts Vitaly Umansky, Eunice Lee and Kelsey Zhu.
They also noted that sequentially, compared to February – a period that included the Chinese New Year holiday – the decline was -4 percent to -3 percent.
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"We forecast Grand Lisboa Palace will have EBITDA of HKD2.0 billion (US$260 million) with 330 tables by 2022, and HKD3.5 billion with 380 tables by 2023"
Credit rating agency Fitch Ratings