GGR to decelerate late 2018, investors wary

    The recent underperformance of 18Q2 has shifted investor sentiment of Macau stocks to that of a measured, potentially over cautious stance, according to Bernstein analysts.  

    With second-quarter GGR below expectation and recent concerns of China’s economic slowdown to create headwinds in the medium term, Bernstein said they have trimmed estimates across the group.

    Earlier this week, the DICJ released Q2 gross gaming revenue figures, which found VIP gaming rose 14 percent year-on-year, the slowest rate of growth in 18 months. The mass market also overtook the VIP sector for the first time since 17Q1.

    “We are now entering a decelerating environment (especially as we move into Q4) with Mass poised to outperform VIP. However, we expect 2H to show deceleration in both Mass and VIP,” said Bernstein.

    Looking into the second half of the year, Bernstein said it forecasts 18H2 GGR growth of 10 percent, with VIP to slow to 6 percent growth and mass at 12 percent growth.

    It also forecasts industry-wide GGR growth of 14 percent in 2018, which will decelerate to 4 percent in 2019 “on more difficult comparisons and headwinds affecting the higher end of the market.”

    “While the recent sector correction has potentially created buying opportunities in certain stocks for long-term investors who can stomach volatility, we are cautious in the near term,” said the brokerage.

    Previous articleSVH posts strong revenue growth across properties
    Next articleRegulation to stimulate growth

    Related Articles

    China Stocks

    Nerves of steel and a long-term view needed for stock investors

    Asia’s gaming stocks have been pummelled by the outbreak of the coronavirus, but with signs China may be bringing the disease under control, is it nearing the time to re-enter the market?

    Economic toll deepens, but underlying optimism intact

    The Coronavirus, now renamed as Covid-19, has devastated the near-term outlook for Asia’s casino operators, though analysts still expect demand to snap back sharply once the outbreak is under control. The big question is when that might be.

    Macau October GGR seen down 73%: Bernstein

    Macau's gross gambling revenue for October is expected to be down 73 percent with channel checks showing GGR up until October 26 at MOP5.95 billion (US$747 million), according to Bernstein research. 

    May GGR expected to be down 90 – 95%: Bernstein

    Analysts at Bernstein Research expect Macau to report a 90-95 percent year-on-year fall in GGR in the month of May, as the gambling enclave continues to be impacted by Covid-19 travel restrictions.  In a filing on Monday, the brokerage noted that month-to-date average daily revenue (ADR) is down 94 percent year-on-year compared to May 2019. […]
    Macau 2020 GGR

    Bernstein sees Macau 2020 GGR down 37%, favours Galaxy

    Macau’s gross gambling revenue is likely to fall 37 percent in 2020, before rebounding strongly next year, and Galaxy Entertainment stands out as the “least risky” gaming company, Bernstein Research said in a note.

    No immediate liquidity concerns for Macau operators

    Macau’s six operators have enough liquidity for the next six months before they are likely to need to draw on debt financing, Bernstein Research reported.

    Macau GGR could decline well over 40% in 2020: Bernstein

    Macau gross gaming revenue could decline “well-over” 40 percent in a slow recovery environment, said Bernstein analyst Vitaly Umansky in a webinar on Tuesday. The decline will depend mainly on visa and transport resumption as it relates to mainland Chinese visitor arrivals.  Currently, visitation into Macau is running at around 10 percent of normal as […]

    Macau GGR set for 8% growth in 2020, driven by VIP rebound

    Macau gross gaming revenue could grow as much as 8 percent year-on-year in 2020, driven by VIP recovery in 20H2, and continued strength in mass.  According to analysts from Bernstein, mass is expected to continue to show strength in 2020, growing at 9 percent year-on-year.  Bernstein noted that a fundamental growth constraint in 2019 was […]

    Wynn Macau to benefit most from rising premium mass

    Wynn Macau is likely to benefit more than other operators when it comes to the growth of the premium mass sector in Macau, according to analysts from Bernstein in a 160-page report on Wednesday.  Year-to-date, VIP has declined mid-teens percentage as growth in mass has remained above 10 percent.  Bernstein said it expects mass GGR […]

    Macau ADR down in first ten days of November

    The first ten days of November are off to a slow start in Macau, with month-to-date average daily revenue (ADR) down 10 percent year-on-year, according to a note from Bernstein on Tuesday. According to channel checks, Macau GGR for November 1-10 is estimated to be MOP7.5 billion, with mass remaining robust, rising by low double […]