Shifting market dynamics to create winners and losers

Thursday 8th of June 2017

Improvements in transport infrastructure along with continued opening and ramp up of new casino resorts in Macau means that Mass will continue to be the driver for sustainable growth in 2017 and the rest of the decade, say Bernstein analysts in a recent research note.

As market share trends fluctuate based on mix between VIP and Mass, the shift between Peninsula and Cotai, and new property openings and ramp up, operators that are able to exploit this shift by relying on product offering, customer acquisition strategy, cost control and marketing process stand to gain.

The brokerage tips Wynn Macau and Melco Resorts & Entertainment to outperform. Wynn Macau continues to gain traction with the ramp up of Wynn Palace while performance at its Peninsula based Wynn Macau holds firm. It also continues to be a share-taker in the VIP market. In Mass, Wynn Palace is strongly positioned in the market over the longer term and should continue to ramp up over the next few quarters as marketing efforts are enhanced and the connectivity to the property improves.

Several catalysts in the medium term – better ramp up at Studio City, the Morpheus opening at City of Dreams, continued organic growth in the Philippines - should benefit Melco Resorts & Entertainment, according to Bernstein analysts. The final sell down of Crown's stake in the company removes an overhang and, in the long run, corporate structure complexity should begin to simplify, including a potential buyout of the Studio City minority interest.

Bricks & Mortar Outperform