Macquarie analysts have described market consensus of Macau gaming’s growth prospects for the year ahead as “too bearish”, arguing recent endorsements of the SAR by Beijing could help the industry outperform consensus in the near-term.
According to Macquarie’s US-based gaming and leisure team, such upside potential could emerge as early as next week’s Chinese New Year Golden Week holiday with the bank also positive on all three US-based Macau operators in Wynn, Las Vegas Sands (LVS) and MGM.
“China values Macau and continues to endorse the destination,” the analysts explained, pointing to the 2023 concession renewals and a raft of positive moves in recent months around visas.
“In 2025, with GGR consensus of +6% [growth], we believe there are opportunities for outperformance as early as Chinese New Year. Beyond 1Q, we expect healthy flow-through, which would lead to EBITDA surprises.”
By operator, Macquarie believes expectations around Wynn Macau are too low, while the bank expects 2025 to be a “turnaround year” for LVS in Macau as its local subsidiary Sands China finishes its renovation program at The Londoner Macao and The Venetian Macao.
“Disruption at the Londoner peaked during 3Q and more rooms should be coming online over the next three quarters,” it said. “Management remains highly confident in the Londoner and expects Phase II to be completed by 2Q25.”
MGM, Macquarie added, maintains a “strong foothold on current levels” in Macau with growth projects in progress.
All three operators are recommended as “Outperform”.
