Several analysts have expressed optimism of a better gross gaming revenue this month, quickly brushing aside the disappointing January data.
The cause of optimism for HongKong-based brokerage Sanford C. Bernstein Ltd., JP Morgan Securities Asia Ltd., and Telsey Advisory Group is the unnoficial industry data of Macau casino’s gross gaming revenue for the first week of February.
The unofficial record showed that Macau GGR for the first five days of February was at MOP1.26-billion (US$157.69 million), which according to JP Morgan Securities Asia Ltd analysts DS Kim and Sean Zhuang was “second highest on record.”
“This is the best daily run rate in 2.5 years (same as 2014 October Golden Week’s), and the second highest Chinese New Year run-rate on record (only after 2014 Chinese New Year, which was MOP1.6 billion per day),” the analysts said in its note issued on Monday.
Sanford C. Bernstein analysts Vitaly Umansky, Zhen Gong and Yang Xie, in a separate note on Monday, attributed the better than expected average daily rate to the “two Chinese New Year holidays [days] and a weekend.”
Data from the Macau Government Tourism Office points to a higher number tourist arrivals in the former Portuguese enclave in the seven days of the Chinese New Year holiday. From January 27 to February 2, the number of Macau tourists rose by 9.9 percent year-on-year to 935,266.
“According to our channel checks, mass revenue was approximately 70 percent higher than recent (non-holiday period) performance while VIP was more than double. VIP hold rate was generally in the normal theoretical range,” the analysts pointed out.
They quickly clarified that higher number of tourists doesn’t always equate to a better gaming performance. Still, the analysts said they are expecting a better casino GGR for this month.
“Assuming an average daily rate GGR of MOP615 million to MOP630 million for the remaining days of the month, we estimate February GGR [in] a range of MOP20.4 billion and MOP20.8 billion. This would represent a year-on-year increase in February of +4.5 percent to +6.5 percent,” the HongKong-based brokerage said.
Analyst David Katz of Telsey Advisory Group LLC, on the other hand, was more cautious in interpreting the latest figures coming from Macau, saying that things will moderate over the remaining days after the first holiday period in February.
He also admits that the Chinese New Year falling on January 28 this year versus February 8 last year “creates a challenging comparisons context.”
“Nonetheless, the start to the holiday period positions the market for a strong month and a strong holiday period on a like for like basis,” he said.