Morgan Stanley is tipping Macau’s casino sector to reach 80 per cent of 2019’s revenues in 2024 with GGR set to increase by 28 per cent year-on-year.
Morgan Stanley analysts Praveen Choudhary and Gareth Leung believe that December’s revenue of US$2.3bn showing more growth than just seasonality, ‘should bode well for a 2024 recovery.’ They are predicting GGR of US$22.7bn for the whole of the year.
The analysts said: “If we assume VIP recovery in Dec was 30 per cent of 2019’s level (23 per cent in 3Q23), mass recovery should be ~20 per cent above 2019. We expect Macau gaming companies to follow the Macau government and increase wages by two to three per cent in 2024. We also think the opex portion of non-gaming investment, and potential competitions for gaming hosts/sales, could put upward pressure to opex.
“On capex, we think companies will accelerate their non-gaming spend in 2024. Sands has the scale to have 76 per cent of its committed investment in capex while other operators will need to spend more on opex, which could impact their margin,” they added.