• 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

Nomura lifts Macau 2017 growth forecast by 50 pct

Mar 31, 2017 Newsdesk Latest News, Macau, Top of the deck  


Nomura lifts Macau 2017 growth forecast by 50 pct

Japanese brokerage Nomura is lifting its year-on-year growth estimates for 2017 Macau casino gross gaming revenue (GGR) by half – a hefty four percentage points – to 12 percent, from 8 percent previously.

“Macro improvements and subsided impact of the anti-graft campaign [in mainland China] continue to lift VIP demand,” wrote the institution in a Thursday report, adding that first-quarter VIP GGR was on track to expand by 5 percent quarter-on-quarter, versus Nomura’s earlier estimate of a 5 percent sequential decline.

The improvement in macroeconomic outlook it said – citing Bloomberg data and its own research – included a steep rise in China property prices from a middle-single digit year-on-year contraction in March 2015, to just above 10 percent year-on-year growth in March 2017.

“Strong VIP performance has led us to lift our 2017 full-year VIP and overall GGR growth estimates to 14 percent (from 2 percent) and 12 percent (from 8 percent), respectively,” wrote Nomura.

Investment analysts indicate that China property prices are typically a proxy – on an up to six-month trailing basis – for VIP gambling performance in Macau. This is on the understanding that strong demand for China property can improve liquidity for Chinese high rollers playing in Macau casinos on junket-issued credit.

The institution was also more bullish than the market consensus regarding the outlook for mass gambling.

“We remain confident about the mass market,” Nomura added.

“In first-quarter 2017, we forecast mass GGR increase of 2 percent quarter-on-quarter, trailing behind 5 percent quarter-on-quarter increase in VIP GGR but still representing healthy growth of 12 percent year-on-year,” noted the institution.

Brokerage Daiwa Securities Group Inc said in a Thursday report on Macau that mass-market GGR growth in Macau “may have been neglected” by the investment community.

Citing what it described as “ground checks”, the institution stated: “We believe mass revenue may grow by over 10 percent year-on-year in first quarter 2017, which may be a surprise to the market.”

Analysts Jamie Soo and Adrian Chan added: “Sector-adjusted EBITDA [earnings before interest, taxation, depreciation and amortisation] would grow by over 20 percent year-on-year in first quarter 2017, or mid-single-digit quarter-on-quarter growth”. This was provided the conditions of sequential GGR growth; what the analysts  termed “a good hold environment” for the casinos; and strong contribution from the mass-market segment had been maintained during the period.

Pac On, Morpheus

Daiwa also noted that GGR for the new Macau properties on Cotai – a land reclamation area separate from the traditional downtown casino district on Macau peninsula – was likely to reach “an inflection point”. It said this would be thanks to the possible May opening of the much-delayed Pac On ferry terminal – located near the city’s airport on Taipa Island and next door to Cotai.

“With the latest Cotai 2.0 openings, we have already witnessed the beginning of a shift in footfall/GGR from the peninsula to Cotai; we believe the opening of [Pac On] will be the tipping point to catalyse this swing,” stated Daiwa.

In other developments, brokerage Sanford C. Bernstein Ltd said in a Thursday note that Morpheus, the fifth hotel tower for Melco Crown Entertainment Ltd’s City of Dreams resort on Cotai, would target premium mass gaming. That was a reference to a segment of players betting typically thousands of Hong Kong dollars per hand, but for cash, rather than via the credit issued to the VIP segment.

Melco Crown’s chairman Lawrence Ho Yau Lung had mentioned – at a November media briefing about the new US$1-billion facility – that it would have some form of gaming.

“City of Dreams Macau operations will be considerably enhanced in 2018 with the opening of the 780-room Morpheus Tower, a luxury hotel targeting the premium mass segment,” wrote Bernstein analysts Vitaly Umansky, Zhen Gong and Yang Xie.

“This addition to City of Dreams will allow the property to remain competitive in light of newer property openings targeting a similar client base (i.e., MGM Cotai and Wynn Palace),” added the brokerage. It was referring first to MGM China Holdings Ltd’s US$3.35-billion Cotai venue due to launch in the second half of this year, and second to Wynn Macau Ltd’s US$4.4-million Cotai property that opened in August.


  • tweet
Related articles
  • Macau ops share junket deposit liability: Macau top court
    Macau ops share junket deposit...

    May 16, 2022  

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

    May 16, 2022  

More news
  • Macau satellite profit model still in doubt: industry
    Macau satellite profit model still in...

    May 16, 2022  

  • Moody’s downgrades SJM debt on slow Macau recovery
    Moody’s downgrades SJM debt on slow...

    May 16, 2022  


Latest News

Macau ops share junket deposit liability: Macau top court

Macau ops share junket deposit liability: Macau top court

May 16, 2022  

Macau’s Court of Final Appeal announced on Monday sentences in relation to a total of nine cases concerning debt claims involving junket operators based at local casinos. In all the cases, the...
Read More
Macau repeat visitors denied visa by China says Bernstein

Macau repeat visitors denied visa by China says Bernstein

May 16, 2022  

Macau satellite profit model still in doubt: industry

Macau satellite profit model still in doubt: industry

May 16, 2022  

Sign up to our FREE Newsletter

UB8V5.qr.16(Click here for more)

Pick of the Day

”Any reduction in [Macau gaming] tax would be positive for future profits and cash flows, all else equal”

DS Kim, Amanda Cheng and Livy Lyu

Analysts at brokerage JP Morgan Securities (Asia Pacific)



Most Popular

  • Macau mulls GGR tax cut if casinos attract foreign playersMacau mulls GGR tax cut if casinos attract foreign players May 13, 2022
  • Macau GGR tax cut may spur 15pct EBITDA hike: JP MorganMacau GGR tax cut may spur 15pct EBITDA hike: JP Morgan May 16, 2022
  • Macau modifies satellite owner plan, rev share ban staysMacau modifies satellite owner plan, rev share ban stays May 13, 2022
  • Macau repeat visitors denied visa by China says BernsteinMacau repeat visitors denied visa by China says Bernstein May 16, 2022
Copyright 2014-2022 TEAM Publishing and Consultancy Ltd / All rights reserved
  • Code of Ethics
  • Privacy Policy
  • Useful Links
  • Contact Us