• 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

Morgan Stanley cuts Macau 2020 GGR growth estimates

Nov 18, 2019 Newsdesk Latest News, Macau, Top of the deck  


Morgan Stanley cuts Macau 2020 GGR growth estimates

Banking group Morgan Stanley has reduced its 2020 estimates for Macau’s casino gross gaming revenue (GGR) growth by 100 basis points.

It now expects 2020 GGR to expand by 2 percent, compared to its previous estimate of 3 percent.

“GGR growth could remain negative in the first half of 2020 unless VIP recovers,” wrote analysts Praveen Choudhary, Gareth Leung and Thomas Allen in a 40-page Friday memo.

“Consensus earnings revisions remain negative,” they also observed.

The outlook for Macau’s VIP gambling segment remains clouded for the remainder of the fourth quarter, said Kwok Chi Chung, president of the Macau Association of Gaming and Entertainment Promoters, in recent comments to GGRAsia.

Morgan Stanley estimated in its Friday report that November and December GGR would be “-9 percent” respectively year-on-year, linked to factors including “weaker VIP” and “high base last year” for GGR.

“For fourth quarter 2019, we expect mass revenue to be up 11 percent, while VIP revenue continues to decline [in this case] by 27 percent year-on-year. For 2020, we estimate mass revenue to be up 11 percent, [with] VIP to be down 13 percent, with GGR up 2 percent (earlier 13 percent),” noted the Morgan Stanley trio.

Morgan Stanley’s 2019 VIP GGR performance has been revised downward – to -20 percent from a previously-estimated -18 percent. The group also highlighted that it had lowered its estimate for 2020 Macau VIP GGR to -13 percent, compared to its previous estimate of -2 percent.

“Our leading indicators (especially liquidity) like M1 minus GDP, TSF etc appear to have bottomed but we think regulatory pressure on money movement and slower China property recovery are the reasons for continued weakness in VIP,” Morgan Stanley’s team stated. They were referring respectively to a measure of China’s basic money supply minus real gross domestic product; and to total social financing in that country.

Morgan Stanley anticipates Macau’s mass revenue growth will decelerate from 14 percent in the third quarter of this year to 11 percent in the fourth quarter. The forecast on the fourth-quarter mass growth, is up compared to the earlier-estimated +6 percent.

The banking group also revised upward its estimate on mass gaming revenue in 2020 from an earlier 7 percent growth to 11 percent.

“We expect new infrastructure (new train station at Hengqin close to the Lotus Bridge and Light Rapid Transit [rail system] in Cotai) will help drive mass revenue growth in 2020-21,” the banking group’s analysts noted in the Friday report. But they highlighted that a decline in performance for the city’s overnight visitor segment – and limited increase in hotel room supply in the coming year – could lead to potential downside to the sustainability of growth in Macau’s mass-market gambling segment.

Morgan Stanley said that market-wide, hold-adjusted property earnings before interest, taxation, depreciation and amortisation (EBITDA) in the third quarter this year grew by 1 percent year-on-year, even when mass gaming revenue expanded by 14 percent. This suggested VIP gaming “remains important” and the “cost structure remains elevated”; in circumstances where no new casinos were being added the city’s market this year, the banking group noted.

“For future performance, we focus on 2020 EBITDA estimates, which have been down 5 percent since January 2019: we do not expect them to go up unless the VIP trend improves,” Morgan Stanley’s analysts wrote. The banking group’s estimated EBITDA growth year-on-year for 2020 has shifted from 11 percent as issued in January 2019, to 6 percent as issued in November 2019.


  • tweet
Related articles
  • Most top Macau hotels at casinos still rooms for May hols
    Most top Macau hotels at casinos still...

    Apr 28, 2022  

  • Philippine casino GGR poss 85pct pre-pandemic by 4Q: MS
    Philippine casino GGR poss 85pct...

    Apr 21, 2022  

More news
  • Foreign tourists can get S.Korean peninsula visa from June 1
    Foreign tourists can get S.Korean...

    May 20, 2022  

  • Crown Resorts’ shareholders nod Blackstone bid
    Crown Resorts’ shareholders nod...

    May 20, 2022  


Latest News

Foreign tourists can get S.Korean peninsula visa from June 1

Foreign tourists can get S.Korean peninsula visa from June 1

May 20, 2022  

South Korea on Thursday said it would from June 1 resume issuing short-term tourism visas for trips to the country’s mainland, for individual visitors and groups of tourists. Permits for...
Read More
Crown Resorts’ shareholders nod Blackstone bid

Crown Resorts’ shareholders nod Blackstone bid

May 20, 2022  

JP Morgan ups Aristocrat profit forecast 8pct for FY2022

JP Morgan ups Aristocrat profit forecast 8pct for FY2022

May 20, 2022  

Sign up to our FREE Newsletter

UB8V5.qr.16(Click here for more)

Pick of the Day

”[Revenue at Okada Manila] will be around 80 percent of the pre-pandemic level in 2022 before recovering almost fully in 2023"

Satoru Aoyama, Akash Gupta and Kalai Pillay

Analysts at credit rating agency Fitch



Most Popular

  • Foreign tourists can get S.Korean peninsula visa from June 1Foreign tourists can get S.Korean peninsula visa from June 1 May 20, 2022
  • Crown Resorts’ shareholders nod Blackstone bidCrown Resorts’ shareholders nod Blackstone bid May 20, 2022
  • 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
  • Andrew Lo takes controlling stake in Suncity, Summit AscentAndrew Lo takes controlling stake in Suncity, Summit Ascent May 19, 2022
Copyright 2014-2022 TEAM Publishing and Consultancy Ltd / All rights reserved
  • Code of Ethics
  • Privacy Policy
  • Useful Links
  • Contact Us