Macau casinos stocks remain attractive after recent rise, analysts say
Stocks rose 23.7 per cent following China’s announcement of a stimulus package.
Macau.- Brokerage CBRE Capital Advisors have suggested that future estimates for Macau casino stock remain attractive after prices rose following China’s announcement of an economic stimulus package. Analysts said current valuations and future estimates for the sector remain attractive but that the average one-year forward EV/EBITDA (enterprise value to earnings before interest, taxation, depreciation, and amortisation) multiple for Macau gaming stocks is at 9.2x, lower than the 2019 average of 11.2x.
John DeCree and Max Marsh added that consensus estimates indicated a revenue growth of 7.3 per cent for Macau’s casino industry in 2025, which, they said “could prove to be overly conservative” if the newly introduced stimulus measures effectively boost economic activity.
China’s latest stimulus package includes cuts to short-term benchmark rates and the Reserve Requirement Ratio (RRR). The plan also includes reductions in residential mortgage rates and the lifting of purchase restrictions in a bid to stabilise property prices.
The CBRE said market analysts believe the package acts as a signal for investment in Macau’s gaming sector. While all operators are expected to benefit, Las Vegas Sands (LVS) and Wynn Resorts are particularly favoured, it says.
LVS has the largest hotel inventory and retail presence in Macau. The casino operator is expected to benefit next year when construction works at The Londoner Macau resort on Cotai are completed. Wynn Resorts was highlighted as one of the “best relative value options”.
