Brokerage raises 2025 growth forecasts as GGR surges

Recent data from the Gaming Inspection and Coordination Bureau (DICJ) revealed that Macau’s gaming market has posted consecutive monthly GGR increases of 19% year-on-year in June and July. This growth follows a modest 1% rise in the first quarter but surged to 8% in the second quarter.

On August 2, Morgan Stanley analysts Praveen Choudhary, Stephen Grambling, and Anson Lee raised their Macau GGR growth forecast for 2025 from 5% to 10% year-on-year. The investment bank also tripled its EBITDA growth forecast to 6% from 2%.

Morgan Stanley attributed this upward revision primarily to a 25% rise in visitation during the second quarter from the mainland, facilitated by easier visa issuance, including multi-entry visas for Shenzhen and Zhuhai, and more cities added to the Individual Visit Scheme (IVS).

The analysts also highlighted additional factors propelling growth, including increases in concerts featuring popular Asian performers, higher junket activity, diversion of visitors from Thailand and Japan, and the strength of the renminbi.

The bank sees Macau transforming into a genuine growth market once again. Morgan Stanley now projects Macau’s 2025 GGR at MOP248.96 billion, with average daily revenues around MOP682 million.

They indicated that market consensus for Macau-wide EBITDA is slightly below their forecast, but they expect “further consensus increases and re-rating for stocks.”

Insights from the second-quarter earnings season suggest that reinvestment costs for mass-market players are not yet declining. Operators such as Sands China Ltd and MGM China Holdings Ltd have gained market share from Wynn Macau Ltd and SJM Holdings Ltd, which saw their share reduced.

Last week, Seaport Research Partners raised its Macau GGR growth estimate from about 7% to 9% year-on-year in light of the July results. Senior analyst Vitaly Umansky observed Sunday that improvements in China’s economy, “especially in the upper middle class and high net worth individuals – should help support Macau GGR growth.”

JP Morgan Securities (Asia Pacific) is also optimistic, with analysts expecting strong results throughout the summer.

Meanwhile, Deutsche Bank Securities Inc. noted that July’s 19% year-on-year increase outpaced prior expectations of 12 to 16% and represented a 5% sequential (+1.6 percent per day) rise compared to June.