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Analysts revise up August GGR estimate

Analysts have revised their monthly estimates for gross gaming revenue, with Macau recording strong occupancy rates and room rates in the most recent week (August 14-20).

According to a weekly report from Bernstein, Macau saw gross gaming revenue month-to-date reach MOP 15.4 billion ($1.9 billion).

ADR for the week was MOP 828 million, with volumes also assisted by popular multi-day concerts at Venetian.

Mass is up by high single digits month-on-month while VIP is up by mid-single digits.

The results has brought month-to-date ADR for the period around 4 percent above July ADR and 32 percent over a similar period (August 1-21) in 2016.

The brokerage also noted that MGM and Sands has gained share month-on-month, while Wynn and SJM saw a share decline month-to-date.

Assuming an ADR GGR of MOP 720 million - MOP 760 million for the rest of the month, Bernstein estimates August GGR to reach between MOP 23.4 billion and MOP 23.9 billion, representing a year-on-year increase of 24 to 26 percent in August.

VIP strength continues

Morgan Stanely analysts also noted that VIP revenue continued to show strength in July, with VIP and mass growing 53 percent and 6 percent year-on-year.

After adjusting for the reclassification of mass revenue as VIP revenue, Morgan Stanley says VIP and mass revenue in July grew 51 percent and 13 percent year-on-year on an adjusted basis, similar to June, which grew 48 percent and 8 percent year-on-year.

“On the back of strength in VIP, we revised our GGR growth for 2017 to 18 percent and VIP growth to 24 percent,” said analysts.

Looking at whether the strength in VIP will continue, Morgan Stanley says that the various China macro indicator - M1 and total social financing (TSF), is holding at an elevated level and supporting the VIP business.

The brokerage also noted a potential premium mass migration to VIP, and higher scrutiny on ATM cash withdrawals that could affect VIP figures.

Looking at August, Morgan Stanley says August VIP roll is headed for higher growth compared to June and July.

 “We expect GGR growth for August and 17Q3 to be both 23 percent. We also expect 17Q3 VIP growth to be 38 percent YoY,” said the brokerage.

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