Operator News

China – Slowing GGR growth rates to take the shine off Macau’s Golden Week

By Phil - 28 September 2018

Analysts in Macau are warning that slowing growth rates in Macau could dampen celebrations in Golden Week with one reducing the target prices for stocks of four casino owners.

They have warned that the slowing Chinese economy and trade war with the states could see October become the first month since February register single digit growth with an expectation growth of five per cent.

Sanford C. Bernstein said: “While the slowdown in GGR growth is evident, we still have a positive outlook on the Macau gaming industry in the long run. Since early 2018, we had been raising caution that Macau GGR growth would decelerate in the second half of 2018 and further in 2019.

“The recent sell-off in the sector has been largely due to investor concerns over decelerating growth, Chinese economy, escalation of US-China trade issues and potential policy risks. Over the short to medium term, these drivers will likely create headwinds for GGR growth, leading to continued deceleration in growth. These short-to-medium-term concerns will continue to weigh on stocks and likely lead to significant price volatility,” it added. “Improvements in transportation and new property openings support long-term growth in mass where the long-term demand is clear.”

As a result, Sanford C. Bernstein lowered its target price for shares in Wynn Macau, Galaxy Entertainment, MGM China and Sands China.