Macau GGR to reach $53 billion in 2022: MS

Monday 6th of November 2017

Macau gross gaming revenue could reach as high as US$53 billion in 2022, driven by infrastructure, visitation and rising spending growth, wrote analysts from Morgan Stanley in a note on Tuesday.

In a report titled: “Macau 2022 - Power of Compounding”, the brokerage says it believes the sector market cap will more than double by 2020, reaching $230 billion.

“We think the quality of growth will be better, as more than 80 percent of the forecast profit should come from the mass market segment. Starting in 2018, we expect to see game-changer infrastructure developments with respect to HK-Zhuhai-Macao Bridge and Hengqin. We also think that by 2022, there will be clarity around license renewal, development capex and infrastructure ramp,” said the analysts.

“However, our long-term valuation could come down if there is either a one-time payment or increase in tax for the license renewal,” it noted.

In the near term, Morgan Stanley says that new hotel supply, better mix and a stable competitive environment will allow for outperformance. The brokerage added it has increased its 2018 GGR growth forecast to 11 percent (from 9 percent) and 2019 to 12 percent (from 8 percent).

Bricks & Mortar Earnings & Filings Growth CAGR GGR