Casinos in Macau generated gross gaming revenues (GGR) of MOP1.80 billion (US$223.0 million) in the first four days of June, in figures cited by JP Morgan Securities (Asia Pacific) Ltd., for a daily run rate of MOP450 million. The figures reflect the seasonal slowdown that usually begins about now, wrote analysts DS Kim and Mufan Shi.
“June is typically the weakest month of the year for Macau,” they said, adding that suggested that GGR is expected to “soften in June given seasonality.
“But quarter-to-date trends suggest casinos will see strong second-quarter results that should continue to beat consensus, with mass and EBITDA [earnings before interest, taxation, depreciation, and amortization] likely recovering 80 percent-plus and 65 percent-plus of pre-Covid levels,” Kim and Shi continued.
According to Inside Asian Gaming, the team added, “Second-quarter results release will coincide with summer holiday season—which will be the first holiday since reopening with no hotel/labor constraints—by which time we hope the investment sentiment (for Macau, as well as Hong Kong/China) will stabilize to appreciate bottom-up fundamental improvements.”
They’re optimistic for full-year 2023, as the gaming mecca continues its post-Covid comeback.
“We do note that Macau stocks have not been reacting to good news and strong prints of late, but we continue to believe that better-than-expected fundamentals will ultimately drive sentiment/the stocks higher as Street numbers move up, which in turn should further shave off valuations to ‘too cheap to ignore’ levels,” they wrote.
Macau’s Gaming Inspection and Coordination Bureau (DICJ) posted an industry-wide GGR of MOP$15.57 billion (US$1.93 billion) in May, up 5.7 percent in April of this year, and a whopping 366 percent higher than the same month in 2022.
Following three years of intermittent Covid-related shutdowns, Macau’s borders finally reopened on January 8.
