After observing robust Chinese New Year (CNY) casino revenue, analysts from JP Morgan expect Macau’s February gross gaming revenue to increase by 80 percent from the previous year to MOP19 billion ($2.36 billion).
In the latest investment memo, JP Morgan notes that the projection represents the highest run-rate of MOP650 million ($80.6 million) per day in over four years. This is compared to the highest print recorded in October, with GGR staying at MOP629 million ($78 million) per day.
The optimistic outlook should also drive 1Q24E GGR to grow mid or high single-digit on a quarter-to-quarter basis.
‘This, coupled with largely upbeat 4Q23 earnings so far, indicates the direction of consensus revision is (very) likely to be positive, bucking overall trends in the China consumer/leisure space amidst China consumption/macro headwinds.’
According to the data provided, Macau’s GGR for the first 18 days of February was MOP12.5 billion ($1.55 billion), translating into MOP694 million ($86.1 million) per day, representing a 75 percent recovery versus the comparable period in 2019.
This also implies a daily run-rate of MOP715 million ($88.7 million) for the past two weeks (encompassing an eight-day CNY holiday).
The data provided show that daily GGR for the peak CNY holidays (Day 4-7) likely hit the MOP1 billion ($124 million) mark for the first time in over four years, exceeding MOP900 million ($111.7 million) run rates during the last Golden Week in October.
In this context, analysts think that Macau’s mass GGR recovered to 120 percent of the 2019 CNY period, about 10 percentage points higher than the pace of recovery in recent months.
‘All-in, we’d characterize this CNY performance as good enough to meet the recently elevated expectations of the market,’ it wrote.
VIP volume 10-14 percent higher from January
In another investment memo from Citigroup, analysts point out that VIP volumes observed this month were 10 to 14 percent higher on a month-over-month basis, while mass volumes were 8 to 10 percent higher from January.
Citigroup notes that the VIP hold rate appears to be below the normal level; however, the research team doesn’t indicate the reason.
The brokerage emphasizes that they are ‘consecutively’ keeping the February GGR forecast unchanged at MOP19.5 billion ($2.42 billion), which is 77 percent of 2019 levels.
