Fitch expects Macau growth to remain around the 20 percent thanks to the government managing growth in the best way possible. The credit rating agency thinks authorities in Macau deciding to manage growth through “supply regulation” is “a positive for incumbent gaming operators’ long-term profitability”. The regulation being talked about is Macau’s decision to cap table growth at 3 percent annually for the next three years and it means that Fitch doesn’t expect any major new casino business locations until 2014-15. They’ve stuck with their earlier estimate that growth will be 20 percent this year and they don’t think there will be a “precipitous decline in visitation or gaming spending trends this year”.
Sands China is in the perfect position to grab a large part of the enclave’s gaming industry. Union Gaming Research Macau analysts stated the opening of Sands Cotai Central is the “perfect mousetrap” with which to garner “an outsized share of the Macau revenue pie”. The “high-margin, high-visibility mass market” will be where the gains will be made. Analysts Grant Govertsen and Felicity Chiang wrote that their new property lets them “disproportionately” gain mass market share as nothing else will open for at least three years.
Bank of America reports Macau will beat their original estimates for the current month. Analysts Billy Ng, Melvyn Boey, Mandy Chan and Angeline Ooi reckon the enclave’s gross gaming revenue could reach MOP26.5 billion (US$3.3 billion) in April. Their original figure was MOP25.5 billion and if it reaches the new total it will be Macau’s second best month ever.
Melco Crown has been raised to “buy” by Goldman Sachs after the opening of Sands Cotai Central. The 12-month price target was raised from HK$33 to HK$44.40 as Goldman analysts, led by Simon Cheung, report the company will benefit from a “spill over effect” after the opening of the new location.
