Bernstein revises 2018 GGR growth forecast after strong 18Q1

After a strong first quarter, Bernstein analysts said they now expect GGR growth for the year to reach 14 percent in the year, up from previous estimates of 11 percent.

“Into mid-May, Macau has continued to surprise on the upside this year… as premium consumers continue to “consume” gaming in Macau,” wrote Bernstein in a note on Monday morning.

The brokerage noted that VIP gained 21 percent year-on-year, while mass grew 20 percent year-on-year in 18Q1.

That being said, the brokerage reiterated its view that VIP will decelerate as we move forward into the latter part of 2018.

“The resilient strength in VIP has continued to surprise, but we are expecting a deceleration in VIP growth as we move into the latter part of 2018 (partly on more difficult comps).”

Thus, the brokerage has now raised its GGR growth forecast to 14 percent, comprising of 17 percent mass growth (from 12 percent) and 12 percent VIP growth (from 9.5 percent).

Bernstein says it continues to have a positive outlook on Macau in the long run, especially in mass. The brokerage notes Melco is its top pick, as it sees company-specific catalysts in the near/medium term, while SJM remains at the bottom of its list, as the company faces continued share loss and delays in opening its Cotai property.