Macau’s results for luck-adjusted EBITDA in 4Q24 are expected to rise by approximately 2 percent quarter-to-quarter, despite higher operational expenses associated with events and promotional activities impacting margins, according to investment bank UBS.
Analysts Angus Chan, Perry Yeung, Ryan Lau, and Robin M. Farley noted that Macau’s Gaming Inspection and Coordination Bureau (DICJ) reported total gross gaming revenue (GGR) of approximately MOP57.4 billion ($7.2 billion) for the quarter, averaging MOP624 million ($77.7 million) per day. This reflects a 6 percent year-on-year increase and a 3 percent sequential growth.
Breaking down the performance by segments, UBS forecasts a 3 percent growth in mass-market GGR and a 5 percent increase in VIP GGR compared to the previous quarter. Despite these gains, UBS notes in its investment memo that its sector EBITDA estimates for 4Q24 are 2 percent lower than consensus projections, with SJM, Galaxy, and Sands driving the shortfall.
In terms of market share, UBS anticipates that Galaxy Entertainment and MGM will gain mass-market share at the expense of Sands and SJM. The report attributes this shift to an increased frequency of events hosted by Galaxy and MGM during the quarter. MGM is expected to post the fastest sequential growth among operators, while SJM is projected to lag behind its peers.
Chinese New Year
Looking ahead to the upcoming Chinese New Year (CNY), UBS highlights several key factors for investors to monitor as companies report their 4Q24 results. These include commentary on CNY trends and the competitive environment in Macau’s gaming sector.
‘A solid CNY performance, proof of event effectiveness, and a moderating competitive environment could be positive catalysts for the sector,’ UBS stated.
While the sector continues to show signs of recovery, UBS emphasizes the importance of gauging the sustainability of demand and margins through operator updates on event-related activities and competition dynamics.
