Macau’s mass gross gaming revenue (GGR) hit all-time highs in May, reaching 115 percent of pre-COVID levels, says JP Morgan.
In a Monday investment memo, JP Morgan notes that Macau’s GGR jumped nearly 30 percent year-on-year to MOP20.2 billion ($2.51 billion) in May, implying a daily run-rate of MOP651 million ($80.3 million), versus MOP630 million ($78.3 million) per day recorded in 1Q24.
These figures also indicate that Macau GGR has already recovered 78 percent compared to pre-COVID levels, while in 1Q24, the recovery rate was 75 percent.
Analysts DK Kim, Mufan Shi, and Selina Li note that the GGR results are notable: ‘The month also printed the best GGR in 50+ months and a record high mass GGR in the history of Macau – quite impressive, especially given mounting investor concerns on macro/consumption elsewhere in China.’
The investment bank notes that GGR also implies a 130 percent recovery rate for premium mass.
For 2Q24, JP Morgan notes that while 2Q EBITDA could pull back slightly quarter-on-quarter given higher operating expenses, such as annual salary hikes starting in April, ‘overall trends seem to track modestly better than expectations so far, suggesting limited risks to consensus earnings.’
In another investment memo, Morgan Stanley indicates that while the full May visitation data is not yet available, analysts expect visitation growth to be below GGR as May Golden Week visitation missed expectations and there were several days of bad weather in May. ‘The robust GGR number suggests the market continues to be driven by premium mass,’ they conclude.
Since June is a seasonally slow month, Morgan Stanley forecasts June GGR at MOP18 billion ($2.24 billion), down 11 percent month-on-month, in line with normal seasonality, and a 75 percent recovery rate.
2Q24 GGR is projected to be MOP56.7 billion ($7.05 billion), down 1 percent quarter-on-quarter, at 77 percent of the 2019 recovery rate.
