Macau to see “sequential recovery” throughout 2021

According to Union Gaming analysts, the Macau gaming industry could see a post-Coronavirus recovery throughout 2021.

Macau.- The Macau gaming industry could see a “sequential recovery” in business post-Coronavirus throughout 2021, according to Union Gaming Securities LLC.

Analysts revealed in a note that operators could casino gross gaming revenue (GGR) return to approximately 80 per cent of 2019 levels by the end of the year.

The analysts said that travel restrictions imposed by the city and authorities in mainland China could contribute to “a quicker and more sustainable recovery” by helping to stop the spreads of Covid-19.

“However, in the interim, the impact of unprecedented GGR declines and cash burn experienced by all concessionaires in the market seems to be under-appreciated by investors,” the brokerage wrote.

“In general, we are forecasting Macau GGR to decline approximately 75 per cent in second-quarter 2020 across the board, by about 45 per cent in third-quarter 2020 and 25 per cent in fourth-quarter 2020,” Union Gaming’s Mr DeCree and Mr Ghafir wrote.

“We forecast a sequential recovery throughout 2021 with operators largely getting back to approximately 80 per cent of 2019 GGR benchmarks by year-end.

“Our overall market estimate may seem overly conservative, but at this point there is just no visibility and we find it prudent to be more cautious,” they added.

The brokerage also said it broadly expects Macau gaming operators’ 2021 earnings before interest, taxation, depreciation and amortisation (EBITDA) to recover to approximately 80 per cent of 2019 levels.