Investor sentiment toward Macau’s gaming sector remains subdued, with JP Morgan noting that stable but unremarkable gross gaming revenue (GGR) may not be enough to improve the market outlook in the near term.
However, analysts DS Kim, Selina Li, and Mufan Shi suggest the sector could present value opportunities. ‘We believe the sector is gradually becoming cheap enough for long-term investors to start accumulating select stocks,’ they noted.
Among their top picks is Galaxy Entertainment, recognized for its ‘best-in-class growth potential from new openings,’ strong financial position, and strategic exposure to Thailand. MGM China was also highlighted as an ‘absolute value pick,’ with a dividend yield exceeding 5 percent.
In Monday’s investment memo, JP Morgan notes that Macau’s GGR for the first 16 days of March reached MOP10.1 billion ($1.26 billion), averaging MOP631 million ($78.9 million) per day. Last week’s run rate remained stable at approximately MOP621 million ($77.6 million) per day.
Analysts noted that mass GGR is performing at over 110 percent of pre-COVID levels, while VIP revenue remains around the low-20 percent range, consistent with trends seen in the fourth quarter of 2024.
Despite this stability, JP Morgan cautions that “‘flattish’ demand may not be enough to improve sentiment positively.” March GGR is projected to remain relatively unchanged year-on-year at around MOP19 billion ($2.37 billion), reflecting a slight change of -2 to 0 percent.
As a result, 1Q25 GGR is also expected to remain stable despite challenging year-on-year comparisons.
Looking ahead, analysts anticipate GGR growth will likely accelerate in the latter half of the year due to easier year-on-year comparisons, forecasting a modest 3 percent increase for full-year 2025.
It is also worth noting that Macau’s Chief Executive, Sam Hou Fai, has warned that the city’s fiscal revenue for 2025 may fall short of earlier expectations due to a sluggish start for the gaming industry.
The government did not specify how much lower the revised revenue forecast might be. Earlier projections estimated Macau’s gross gaming revenue (GGR) for 2025 at MOP240 billion ($29.7 billion), an increase of about 11 percent from the 2024 budget forecast of MOP216 billion ($27 billion).
