Inside Asian Gaming

INSIDE ASIAN GAMING | January 2014 16 “O ur estimates are ahead of consensus by 3-10% for 2014 EBITDA. We also believe that operating leverage could mean 13-39% year-on-year EBITDA growth in 2014, versus the consensus of 9-27%,” wrote Morgan Stanley’s Praveen Choudhary in a recent report. The report gives an overall growth figure of 18.3% (2014 consensus is 12.3%), revised significantly upwards from the company’s original forecast of 13%, giving a gross gaming revenue (GGR) figure of US$53 billion for 2014. According to the report, given that annualizing Q4 2013 revenue into 2014 would result in 11%, positive revision is very likely. The figure is comprised of 13% growth in VIP gaming and 28% in mass, thus the optimistic forecast for increased operating leverage. Key Factors The report’s case for the upswing in mass spending is based in the main on three factors. The first is movement of tables from VIP to mass, with the proliferation of premium mass to other casinos after successful implementation by MPEL/MGM expected to have an impact. Golden Run to Continue Macau’s 2014 growth is set to outperform consensus expectations, according to Morgan Stanley FEATURE Source: Company Data, Morgan Stanley Research Increasing number of mass tables —Operators shifting VIP tables to mass .