Macau gaming recovery to continue despite China slowdown, analysts say

CBRE Equity Research thinks pent-up demand will continue to drive a recovery in Macau.

Macau.- CBRE Equity Research believes the region’s pent-up demand for leisure, travel, and entertainment will continue to drive Macau’s recovery despite a slowdown in China.

Analysts John DeCree and Max Marsh said that despite the moderation in May’s recovery pace, they maintained a positive outlook for continued sequential growth in the upcoming months and quarters. The expansion of Macau’s travel capacity and the opening of more hotels and amenities are expected to contribute to the sustained recovery.

Analysts noted a decline in gaming stocks in May due to concerns over the potential economic slowdown in China. However, CBRE’s research team believes that Macau’s recovery can endure such challenges. They expect the trajectory of earnings before interest, taxes, depreciation, and amortization (EBITDA) to accelerate faster than gross gaming revenue, driven by a greater mix of the mass market and cost-saving initiatives.

Macau’s gross gaming revenue (GGR) reached MOP15.57bn (US$1.93bn) in May, marking a 365.9 per cent increase compared to the same period last year. The figure represented a 60 per cent recovery compared to May 2019, indicating a slight deceleration from April’s 62 per cent recovery. 

Accumulated GGR for the first five months of the year in Macau was MOP64.93bn (US$9.71bn), a 172.9 per cent yearly increase. According to Moody’s, Macau’s GGR should reach 45 per cent of 2019 levels this year at roughly MOP131.6bn (US$16.31bn). 

See also: Macau GDP rises 38.8% in Q1