Analysts: January GGR might be better than expected

Macau gross gaming revenue since the opening of the year seems to be holding much steadier than what analysts had earlier predicted. Total GRR for the first twelve days of this month was approximately MOP10.3 billion.

In a memo – seen by GGRAsia – issued by JP Morgan Securities (Asia Pacific), the brokerage firm suggested that the VIP and mass market segments had both showed signs of a solid recovery from recent months.

Gaming revenues typically decline before the Chinese New Year period.

However, due to a strong start to January, analysts hinted that Macau’s GGR this month may end positive in year-on-year terms.

“That said, given strong month-to-date trends and seemingly solid Chinese New Year hotel bookings, we wouldn’t be surprised to see January printing flat or even marginally positive growth in GGR,” said JP Morgan analysts DS Kim, Derek Choi and Jeremy An.

The city’s gaming revenue in the first half of December saw its worst year-on-year decline since March 2016.

January is faring much better, with mass market GGR trending some 10% higher year-on-year, while the VIP segment was “dropping only low/mid-teens” during January 1 to 12.

“While year-on-year comparison is difficult due to a calendar shift in Chinese New Year holidays, this is undoubtedly a robust number for a non-holiday period and better than what we and the market expected,” said the analysts.

The analysts also suggested that the improved performance might be due to the “pent-up demand,” as temporary visa and travel restrictions were lifted following the visit of Chinese President Xi Jinping.

Meanwhile, JP Morgan still keeps its GGR predictions at -2% year-on-year, as a sharp pre-holiday slow-down may occur in the next two weeks.

Brokerage Sanford C. Bernstein, which recorded a month-to-date average daily rate of MOP885 million in January, said that they estimate -1% to +2% year-on-year for both January and February. LV