Macau operators’ value to reach US$146 billion

Combined market value of Macau’s six casino operators is expected to reach US$146 billion by 2020, Morgan Stanley projects.

Macau.- Morgan Stanley released a note on Monday revealing that it expects the six Macau casino operators to reach a market value of US$146 billion by 2020. The brokerage explained the growth is expected to be driven by a 13 per cent revenue growth CAGR (compound annual growth rate) if it overcomes some hurdles the segment will face in the near future.

According to Morgan Stanley, the licence rebidding process is expected to post a major threat to the projected growth for the industry in Macau. In addition, competition from Japan and Hainan for Chinese gamblers could also be a focus of disruption for the segment.

“In case of licence renewal, it could either have a negative monetary impact or outright loss of gaming profit,” analysts said and added: “With the potential opening of Japan and Hainan, the pie could shrink meaningfully.”

Furthermore, the brokerage explained that US gaming stocks will more likely be in a better position to face any potential disruptions. However, Galaxy and Sands China are also expected to better handle any hurdles due to their size and higher margin.