Macau’s gross gaming revenue is estimated to have reached a combined MOP$1.8 billion (US$221.5 million), or MOP$450 million (US$55.4 million) per day, for the first four days of June, around 10% lower than the May run-rate according to JP Morgan’s weekly channel checks.
The slowdown is not unexpected, however, with JP Morgan’s DS Kim and Mufan Shi stating that the “absolute level of GGR will soften in June given seasonality” and noting that June is typically the weakest month of the year for Macau.
Despite this, the analysts remain confident that Q2 results will remain strong enough to beat consensus, with mass GGR tipped to reach 80% of pre-COVID levels and industry EBITDA to return to 65% – up from 65% and 45% respectively in Q1.
They also have high hopes for the road ahead, with 2Q23 results releases to coincide with summer holiday season, which will be the first holiday since reopening that isn’t constrained by hotel labor supply issues.
“We hope the investment sentiment (for Macau, as well as HK/China) will stabilize to appreciate bottom-up fundamental improvements,” Kim and Shi wrote. “We do note that Macau stocks have not been reacting to good news and strong prints of late, but we continue to believe that better-than-expected fundamentals will ultimately drive sentiment/the stocks higher as Street numbers move up, which in turn should further shave off valuations to ‘too cheap to ignore’ levels.”
Macau’s DICJ last week reported industry GGR of MOP$15.57 billion (US$1.93 billion) in May, up 5.7% on April and 366% higher than the same month in 2022.
