The growth trajectory of Macau’s gaming industry remains uncertain, with only modest growth observed in recent months, according to analysts from Jefferies.
The sector is facing macroeconomic challenges in China, which continue to exert pressure.
However, Macau operators are expected to focus on expanding their market share in the region through asset optimization and promotional strategies like player referral programs. Jefferies predicts a decline in gaming revenue for April compared to March, citing the month’s seasonal weakness. They also anticipate a gradual return to pre-Covid trends.
Meanwhile, a research report by Macquarie indicates that Macau’s gambling revenue in April is projected to reach MOP 17.6 to MOP 18.7 billion. This estimate is based on third-party data showing an average daily gambling income of MOP 600 million last week, with expectations of MOP 580 million to MOP 630 million for the rest of the month.
The projected revenue represents 75% to 79% of the same period in 2019 and reflects a strong recovery trend compared to last month. Macquarie also mentions that the proposed Macau Gaming Credit Law, set to take effect in August, will have slightly relaxed regulations compared to the previous draft from March.
The bank believes that the impact of prohibiting intermediaries from directly issuing credit is controllable. The bank prioritizes Galaxy Entertainment and Sands China among the Macau gambling stocks.
Meanwhile, investment group CLSA raised its gross gaming revenue forecast for Macau by 4% to USD30.3 billion for 2024, according to a research report.
The institution also kept its GGR forecast for 2025 at US$31.9 billion. However, CLSA lowered its Ebitda forecasts for 2024 and 2025 by 1-3%.
As Macau gradually normalizes, CLSA was bullish on stocks with strong balance sheets and recurring free cash flow generation, with MGM China and Sands China being its top picks.
Hong Kong United Times丨香港聯合時報丨HKUT 