Macau 18Q2 underperformance reflects normal seasonality

Morgan Stanley analysts are expecting Macau revenue to grow 19 percent year-on-year in 18Q2, but decline two percent quarter-on-quarter, in line with normal seasonality.

However, the brokerage also noted that Macau stocks have underperformed, influenced by news of the UnionPay POS terminal removal and the potential disruption from the World Cup.

Looking at the second half of the year, Morgan Stanley said they are optimistic, as stocks tend to outperform during the second half of the year.

“Most companies don’t need a big upturn in 18H2 to meet full-year 2018 estimates. Thus, we see risk of positive estimate revisions,” said the brokerage.