Macau’s GGR to be up 3 to 5 pct in June

Analysts at Bernstein said that they expect Macau’s gross gaming revenue (GGR) to be up between 3 to 5% in June.

Macau.- Bernstein Research analysts issued a new report in which they indicate that gross gaming revenue (GGR) will likely be up by 3% to 5% in June. While these numbers are lower than in April and May, Macau would still report positive figures.

The analysts said that between June 1-9, GGR was €722 million. This means that there was an average daily rate of €80.7 million, which is a 12% fall from May and 6% from April. Bernstein also said that VIP will likely be down in mid-single digits and mass in low-single digits.

“Heading into June and July, we expect y/y comparison to begin easing. Recall GGR was quite robust in early 2018 until US-China trade tensions heightened beginning last summer. One area of potential high-end GGR stabilization and renewed strength may come from a recovering credit cycle in China which may support VIP recovery in 2H,” said the analysts.

Morgan Stanley foresees more decline in VIP

Last week, Morgan Stanley analysts said that gaming stocks in Macau have underperformed by 5% due to underperformance to continued weakness in VIP and gaming gross revenue (GGR).

The analysts said that mass revenue growth remained robust in the first quarter and increased 10% year-on-year. “We expect it to improve to 12% year-on-year in the second quarter. We are raising our 2019 mass growth expectation from 7% to 10% but cut our VIP growth estimate from a decline of 6% to a decline of 14%.”

Morgan Stanley said that increased competition from ASEAN countries, as well as the newly enforces smoking ban and continued crackdown on illegal banking will continue to affect the VIP segment in 2019. The VIP decrease drove the brokerage to adjust the estimates for GGR in 2019 from a 1% increase to a 1% decrease year-on-year. However, it estimates that EBITDA will rise 2% in 2019.