GGR in Macau to reach $53bn

Morgan Stanley estimated that gross gaming revenue could reach US$53 billion in 2022 in Macau.

Macau.- Analysts from Morgan Stanley revealed in a note on Tuesday that gross gaming revenue (GGR) in Macau could be as high as US$53 billion in 2022 due to an increase in spending growth, visitation and infrastructure.

The report called “Macau 2022 – Power of Compounding” establishes that the market cap will double its size by 2020 to US$230 billion. “We think the quality of growth will be better, as more than 80 percent of the forecast profit should come from the mass market segment. Starting in 2018, we expect to see game-changer infrastructure developments with respect to HK-Zhuhai-Macao Bridge and Hengqin,” said analysts.

Moreover, they added that they believe that by 2022 there’s going to be more clarity around the renewal of licenses, development apex and infrastructure ramp. “However, our long-term valuation could come down if there is either a one-time payment or increase in tax for the license renewal,” it added.

Morgan Stanley also estimates that a stable and competitive environment, as well as new hotel supply and better mix in the near term will make place for outperformance. The GGR growth forecast for 2018 has been increased from 9 to 11 percent, and the one for 2019 from 8 to 12 percent.