Macau: Gaming revenue expected to hit over USD 1.17B – JP Morgan

Based on its checks, gross gaming revenue for the first 12 days of February is estimated at MOP4.4 billion, or a daily average of MOP367 million.

JP Morgan is “still feeling (very) good about recovery”, analyst DS Kim noted in a recent report, as the gross gaming revenue run-rate for February remains largely stable and solid, considering the softer seasonality during the lull period following the Chinese New Year holiday.

The month-to-date print represents a 40 to 45 per cent recovery compared with pre-Covid levels for headline gross gaming revenue, in turn suggesting that mass-market gross gaming revenue recovered to 60 to 70 per cent of pre-Covid levels.

JP Morgan estimated that the SAR’s gross gaming revenue for February would stand at some MOP9.5 billion, representing a daily average of MOP350 million.

The brokerage also reiterated that all gaming operators should already be printing positive free cash flows (= EBITDA + internet costs + maintenance capex) at this level, which, if true, would be 2 to 3 quarters earlier than what the market had expected.

Macau’s gross gaming revenue skyrocketed by 82.5 per cent year-on-year to MOP11.6 billion in January, after pandemic-related restrictions were lifted, according to figures from the Gaming Inspection and Coordination Bureau (DICJ).

As Chinese package tours resumed from 6 February, Morgan Stanley analysts put February’s gross gaming revenue at MOP11.2 billion, representing 44 per cent of the figure recorded in the same period in 2019.

The brokerage said that if February’s gross gaming revenue turned out strong, the market could revise its 2024 estimates upwardly.

By Therese Tu