Gaming Govertsen: Macau recovery will hold in Q1

Macau-based gaming analyst Grant Govertsen told the Times this week that speculation over another dip in Macau’s gross gaming revenues is not something he foresees for the first quarter of 2017.

According to Bloomberg, the gauge of Macau’s six casino stocks is now valued at 24 times the projected earnings for the next 12 months, exceeding its peak of 22 in 2014. With conditions reminiscent of those in 2014, some options traders are beginning to wonder whether the recent gaming revival will be short-lived.

However, the managing director at Union Gaming Securities Asia still expects year- on-year gross gaming revenue growth to hold in the “mid- to high-single digits for the first quarter.”

“The reality is that these stocks are still about half of what they were in 2014,” argued Govertsen. “What we are seeing makes sense for a market [seeing] growth again.”

In his view, the mass-market segment is holding strong, having posted steady gains in the past half-year. On the other hand, there are justifiable doubts over the VIP sector.

Gross gaming revenue in Macau grew by 3.1 percent in January to MOP19.3 billion (USD2.4 billion), following an 8 percent year-on-year increase in December. The change was significantly below the median estimate of an 8.5 percent expansion in January by analysts surveyed by Bloomberg.

Due for release next week, February’s figures will compare with last year when the busy period of the Chinese New Year fell entirely in February, while this year’s was split between the first two months of 2017. DB