Tuesday, June 25, 2024
HomeNewsMacauMelco’s strategic investments and market positioning helped enhance performance: Bank of America

Melco’s strategic investments and market positioning helped enhance performance: Bank of America

Melco Resorts & Entertainment received an upgrade from Bank of America in a decision said to reflect the gaming operator’s strategic investments and market positioning.

Bank of America shifted Melco’s rating from Neutral to Buy, with its analysts attributing the upgrade to the gaming operator’s intensified focus on customer service improvements initiated at the beginning of the year.

‘This strategic shift has started to yield positive results, with industry checks indicating a reduction in aggressive promotional competition. Consequently, Melco is expected to experience a sustained recovery in its market share of Macau’s gross gaming revenue (GGR),’ the investment bank said.

Melco operates several gaming establishments in the Macau SAR, including Mocha Clubs and Altira Macau in Taipa, as well as City of Dreams and Studio City in the Cotai Strip. The company also is partner in City of Dreams Manila in the Philippines and manages City of Dreams in Cyprus.

The group has also recently been awarded a 20-year casino license to operate City of Dreams Sri Lanka, in the country’s capital of Colombo.

The combination of Melco’s strategic investments in customer service, favorable market conditions, and positive industry trends has positioned the company for sustained growth, justifying Bank of America’s upgrade and optimistic price target.

Macau’s gaming revenue is surpassing expectations for the first 19 days of May, driven by visitors rebooking trips initially postponed due to unfavorable weather during the Labor Day Golden Week.

According to Jefferies analyst Andrew Lee, this higher-than-expected visitor turnout is boosting Macau’s GGR, potentially leading to the highest monthly average daily rate (ADR) since the pandemic began.

Citigroup has also adjusted its forecast for Macau’s casino GGR in May, increasing it to MOP20.50 billion ($2.55 billion), up from a previous estimate of MOP20 billion ($2.4 billion).

This revised figure represents 79 percent of the pre-pandemic level for the same month in 2019, underscoring the robust recovery of Macau’s gaming sector.

Nelson Moura
Nelson Mourahttp://agbrief.com
Editor and reporter with 10 years of experience in Greater China, namely Taiwan and Macau, in printed and online media, with a focus on finance, gaming, politics, crime, business and social issues.



daily newsletter