Operator News
CLSA raises forecasts on Macau’s revenues due to improving footfall
By Phil - 8 April 2024
Asian capital markets and investment group CLSA has increased its guidance for Macau’s casino revenue in 2024 by 3.5 per cent, saying that improving visitation should push GGR to US$30.3bn.
This would give the sector growth of 34 per cent year-on-year with another five per cent envisaged for 2025 taking that year’s total to US$31.9bn
CLSA analysts Jeffrey Kiang and Leo Pan said: “The sector’s balance sheet strength has improved, as net debt declined four per cent year-over-year in 2023. MGM China and Wynn Macau have already resumed dividends, which surprised investors. We continue to attribute such resilience to Macau’s niche positioning, targeting less than two per cent of China’s population. Galaxy, Melco and SJM are introducing smart chips in 2024 to better target premium players for promotions and improve table turnover. Similarly, Melco emphasised the need for higher efficiency on its promotional spending.”
“Apart from Galaxy, we still believe MGM China and Sands China have the strongest balance sheets. We expect the sector’s EBITDA to be eight per cent below 2019’s level in 2024, but to be one per cent below 2019’s level by 2025. We still factor in minimal sequential margin expansionCompany-wise, we also factor in the revamp of Londoner Phase 2, for which we expect meaningful disruptions of incumbent operations to kick in from 2Q24 to 4Q24. This would weigh on Sands China’s GGR market share in 2024, with other concessionaires likely gaining market share. Sands China should reap the rewards from revamping Londoner Phase 2 from 2025.”
