October GGR results appear promising: Bernstein

Thursday 8th of October 2015

October gross gaming revenues are expected to decline between 28 percent and 31 percent year-on-year, with the month possibly being the first month since January to post better “less bad” results, Bernstein Research said.

In a note, Bernstein analyst Vitaly Umansky said business has been strong over October Golden Week, with GGR average daily rate during the first 5 days estimated at MOP850 million ($106 million) to 900 million, 50 percent better than September ADR, on the back of both strong VIP and mass.

“We forecast October GGR to decline between -28% and -31% y/y. October may be the first month since January to post better than down 30%+ y/y GGR's as we enter into Q4 which can finally be said to be ‘less bad’.”

However, while a good start to Golden Week is encouraging, strength continuing into the rest of October and post-opening of Studio City will be critical to maintain stock price levels.

The statements of both the Macau and Chinese governments outlining that they are seeking to provide measures to support Macau's economy, and as a result the gaming industry, have dramatically improved investor sentiment and led to a stock rally of over 21 percent since September 30, added the note.

However, time will tell what the policy measures may actually be.

“Macau has a history of government statements not leading to much impact on GGR or not resulting in what both investors and companies initially expected.”