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Macau to see ADR softening for remainder of month

Macau gross gaming revenue results for the week October 11-16 was worse than expected with significant slowdown following the golden week period, said Bernstein in a note on Monday.

According to the brokerage, Macau’s month-to-date GGR is MOP 12.7 billion ($1.6 billion), while last week’s ADR was MOP 491 million, down 50 percent week-on-week.

“The decline is partly seasonal as a reduction in post-Golden Week activity, but was also negatively impacted by the three-day visit to Macau by Chinese Premier Li Keqiang. We estimate that a larger portion of the decline was related to VIP volume (along with lower VIP hold rate),” said the brokerage.

In a note from CLSA on Monday, the brokerage notes stronger table run rate, and “reasonably strong volumes” despite the visit of the Chinese Premier.

“Our most recent inspections and channel checks indicate that the tables only revenue as of the 16th is estimated at approximately HK$13.3 billion. Based on this, the previous 6 days table run rate comes in at approximately HK $580 million, which is stronger than we had expected... although we are hearing of reasonably strong volumes despite the visit from Prime Minister Li.”

The brokerage adds it expects a softening of ADR for the remainder of the month.

“Given the expected seasonal softening plus the likely impact of the two typhoons, and including a conservative HK$950 million for slots, we have estimated the full month projection to be approximately HK$21.8 billion (MOP 22.4 billion), which would be an increase of 11.7 percent [year-on-year].”

Bernstein went with more conservative estimates, assuming an ADR of MOP 530-570 million for the remainder of the month, says it expects October GGR would be in the range of MOP 20.6 - 21.2 billion, a year-on-year increase of 3 - 6 percent.

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