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Wynn seen leading Q1 EBITDA growth: MS

Wynn Resorts is expected to post the highest growth in property EBITDA for Q1, with MGM Resorts lagging Macau’s operators, according to Morgan Stanley projections.

The firm said it expects combined property EBITDA growth of 26 percent year-on-year in the first three months of the year to $2.4 billion. Gross gaming revenue in the quarter was up 21 percent to $9.6 billion.

During the period, Wynn's property EBITDA is expected to have grown by 16 percent quarter on quarter and 46 percent year-on-year to $436 million. MGM China’s Q1 property EBITDA is seen as having grown 2 percent from the prior year and fallen 4 percent compared with Q4. The report covered the five Hong Kong-listed Macau operators and didn't include projections for Melco Resorts & Entertainment.

Once again VIP was the main source of revenue growth rising 24 percent from the same period in 2017, outstripping the mass sector which is likely to have grown 17 percent.

That said Morgan Stanley is optimistic about the mass sector this year and recently revised upwards its revenue projections to 15 percent on the back of more hotel rooms, visitation from lower-tiered Chinese cities and the opening of the Macau-Zhuhai-Hong Kong bridge later this year.

SJM Holdings is seen posting property EBITDA growth of 6 percent quarter-on-quarter, while Galaxy is likely to grow 2 percent on the same basis. Sands China’s EBITDA should grow 5 percent from the preceding quarter.

In terms of stock performance, Morgan Stanley notes that the figures for Wynn and MGM are already largely priced in by the market. It says SJM Holdings and Sands China may do better than Galaxy Entertainment in the near term.

SJM shares could rally in the six to nine months leading to the opening of its Lisboa Palace resort on Cotai. However, the firm says it doesn’t expect the property to make its debut before the second half of 2019.

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