GGRAsia – Premium mass July GGR comeback 100pct of pre Covid: JPM

Premium mass July GGR comeback 100pct of pre Covid: JPM

Aug 01, 2023 Newsdesk Latest News, Macau, Top of the deck

Macau casino gross gaming revenue (GGR) probably recovered in July to “100 percent-plus” of pre-pandemic levels in terms of the so-called premium mass segment, says a Tuesday note from JP Morgan Securities (Asia Pacific) Ltd.

The brokerage observed it was part of a monthly performance for the Macau market that represented “another post-pandemic high”.

Macau’s GGR in July rose 9.6 percent month-on-month, to MOP16.66 billion (US$2.07 billion), according to an announcement from the local regulator, the Gaming Inspection and Coordination Bureau.

The result “suggests mass GGR recovered to 92 to 93 percent of pre-Covid levels, versus 87 to 88 percent in the second quarter,” stated the memo from analysts DS Kim and Mufan Shi.

According to JP Morgan’s estimates, the July result involved “100 percent-plus recovery in premium mass versus circa 80 percent [recovery] in grind/base mass”.

Premium mass is a player segment typically involving high minimum bets, but settled in cash, and not utilising the credit and rolling chip system used for traditional VIP betting.

JP Morgan said it estimated that recovery in the VIP segment “edged up to 27 to 28 percent in July, versus circa 24 to 25 percent in the second quarter”. Though the analysts added VIP improvement “still doesn’t move much the needle” for earnings before interest, taxation, depreciation and amortisation (EBITDA) and cash flows.

The institution said the July performance implied a daily GGR run rate of MOP537 million, up about 7.4 percent on the second quarter’s MOP500 million daily average, and a bounce back of about 68 percent on pre-Covid levels.

The monthly print “implies GGR run-rate has likely improved to about MOP600 million a day in late July,” stated JP Morgan.

The analysts added the overall July result was an approximately “4 percent beat versus latest consensus of MOP16 billion… which is pretty respectable given the drag from the Typhoon Talim in mid-July”.

That was a reference to a tropical storm that passed some distance from Macau, but nonetheless led to the No.8 Signal to be raised for the city, leading to the shutting down of public transport for most of one day.