Melco, Wynn and Galaxy to lead post Covid-19 recovery

Sandford C. Bernstein says the three companies have advantages over other operators due to their higher focus on premium mass and VIP players.

Macau.- Melco Resorts, Wynn Macau and Galaxy Entertainment Group are best placed for a post-Covid-19 recovery, according to Sandford C. Bernstein.

The analyst said the three companies have advantages over other operators due to their higher focus on premium mass and VIP players.

“The early phase of the recovery should be driven by the high end and operators that have relatively higher exposure should outperform others.

“Melco and Wynn Macau (and to a lesser extent, Galaxy) should outperform in the early stages of the Macau rebound driven by premium mass and VIP recovery,” the brokerage said in a report.

Analysts Vitaly Umansky, Eunice Lee and Kelsey Zhu were optimistic that travel and border restrictions with Macau will be lifted by early June with the Chinese individual visa scheme (IVS) and group visas to “start soon after in a phased manner”.

The brokerage said this was essential to ensure a solid recovery of the VIP and mass-market gaming results over the next 18 months.

The number of visitors in the first four months of 2020 fell 76.6 per cent year-on-year to 3.2 million, with Mainland China visitors down by more than 70 per cent to 2.3 million.

Meanwhile, gross gaming revenues have dropped by almost 68 per cent year-on-year in the first four months to MOP31.2billion (US$2.9billion).

Bernstein said Melco and Wynn Macau focus on the higher end premium gaming customer and their product positioning offers would give them a competitive advantage over the first few months of a high-end recovery.

Meanwhile, Galaxy and Sands China were considered to have more rounded businesses with more exposure to the mass market, with large-scale offerings to take longer to ramp up.