Macau’s gaming operators are estimated to have generated gross gaming revenue of around MOP$4.55 billion (US$565 million) or MOP$910 million (US$113 million) a day during the five-day Golden Week holiday from 1 to 5 May, surprising to the upside against predictions of no more than MOP$850 million (US$106 million) per day according to JP Morgan analysts.
In a Monday note, the investment bank said the strong print was primarily due to the quality of players who made their way to Macau given that total visitation was itself somewhat underwhelming. If accurate, the estimate is 5% to 10% above expectations and 5% faster than recent recovery trends.
Analysts DS Kim, Mufan Shi and Selina Li said the print also implies mass GGR reached 120% of pre-COVID levels with VIP back at 30%. However, they warn against extrapolating the Golden Week data for the remainder of May.
Meanwhile the analysts are predicting double-digit EBITDA growth for Macau concessionaires Wynn Macau Ltd and SJM Resorts SA when they report their 1Q24 results this week, however Galaxy Entertainment Group is seen booking a sequential pull-back in EBITDA.
“This divergence here happens as the industry’s recovery stabilizes after a year of a ‘re-opening rally’, in turn making idiosyncratic factors (market shares, opex control, promotions) the key earnings driver, in our view,” they wrote.
“We expect diverging earnings revision trends into and post-1Q results, which should create alpha opportunity within the sector.”
