The upcoming visit of Chinese President Xi Jinping to Macau could have a negative impact on the gaming sector, says equity research analyst Angela Han Lee.
Xi Jinping is scheduled to visit Macau for the 20th handover anniversary ceremony.
Lee pointed out that five years earlier when the President visited Macau for the 15th handover ceremony, there were a number of crackdowns which marked a period of falling local gaming revenue.
“Recall what happened five years ago, before he came, there were many kinds of crackdowns like visa policies, implementation of smoking bans… There could be more negatives in the policy side than positives.”
Lee said she doesn’t expect much recovery this year, but said there would be a more meaningful recovery in the first half of next year.
Speaking about the Hong Kong Zhuhai Macau Bridge, Lee said this has helped drive traffic to Macau, especially from mainland China.
That being said, Lee noted that much of this is what she dubbed “low-quality traffic.”
“They can’t actually gamble or bet as much as high rollers in China,” she said. “So it’s really driving up the mass market, but it isn’t as big as what people are expecting.”
Nevertheless, the increase in mass has helped to keep the Macau gaming market in a growth trajectory – as it has helped to offset declines in VIP, she said.