Brokerage Sanford C Bernstein has revised down its 4Q19 earnings estimates for Macau’s concessionaires, with quarterly GGR now expected to fall 7% year-on-year.
Analysts had previously estimated Q4 revenue to decline 5%, with VIP GGR down 17% year-on-year and mass rising by 5%. However, after the VIP segment performed “worse than our prior estimate) in 3Q19 – falling 24% instead of the 21% expected – analysts Vitaly Umansky, Eunice Lee and Kelsey Zhu have now revised downwards with VIP expected to fall by closer to 26%.
The expected 5% decline comes despite the fact that Bernstein has revised up its estimates for the mass market segment, with 4Q19 mass GGR now tipped to rise by 9% year-on-year.
It will also reflect a general fourth quarter improvement compared with 3Q19, with Macau-wide GGR to show a 5% sequential increase. The Macau government recently revealed that the SAR’s casino operators generated GGR of MOP$71 billion (US$8.8 billion) in the third quarter, with revenue from mass market baccarat drawing level with VIP baccarat for the very first time.
Bernstein is estimating Macau’s 4Q19 GGR to come in at around MOP$73.5 billion (US$9.1 billion).
“Q4 has shown negative quarter-on-quarter GGR only once in the past decade, in 2014 (-8% on sequential declines in both VIP and Mass),” they said in a Friday research note.
“Over the past 10 years, quarter-on-quarter growth in other years has been anywhere from +14% (2015) to +16% (in 2010), averaging over 6% since 2010.”
