Following Galaxy Entertainment’s financial results, UBS said there have been some signs of gradual stabilisation in mass segment revenue in recent weeks but it is too early to call it a “trend.”
“This is especially true for the mass segment, where management noted mass Buy-Ins in the last 3-6 weeks (i.e. from late Q1) have shown some decent numbers, although it is “too early to call a trend”.
“We see this as an encouraging sign, though we caution that industry-wide daily GGR so far in Apr at MOP610m is >10% lower than Feb-Mar average. This might mean recent industry weakness has been driven more by VIP segment or hold issues – we think Galaxy’s overall market share in Apr has been lower/consistent with Feb-Mar,” analyst Anthony Wong said in a note.
GEG’s 15Q1 EBITDA drop of 40 percent to HK$2.30 billion was inline with UBS’ and consensus estimates of HK$2.29 billion, Wong said.
“Better operating results in StarWorld/Galaxy Macau were driven by higher mass in business mix than expected – group mass revenue -15% YoY/+4% QoQ, higher than our forecasts of -18%/+1%; meanwhile group-wide VIP rolling volume was -43% YoY/-24% QoQ, inline with our forecasts.”
The analyst added that GEG’s hotel occupancy was lower than expected.
Separately, hotel occupancy at StarWorld/Galaxy Macau at 93%/95% in Q1 is lower than expected (though Apr to date rooms are full according to mgmt.), highlighting weak demand from overnight visitors.