Macau gaming sector’s revenue dipped 4.9% in January

Here’s how VIP turnover will pick up the slack.

According to Maybank Kim Eng, Macau gross gaming revenue (GGR) slowed in January, growing at 7.3% YoY and declining -4.9% MoM to MOP26,864m compared to the previous year  MOP25,040m. Maybank adds, the daily run rate momentum probably slowed in the last week of the month compared to the start of the month which pointed to a 11% growth. 

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Implication: We believe some broker are way ahead of the curve with their call on a strong resurgence of VIP growth (where we have an estimate of 5% VIP growth) and this should be taken with a pinch of salt given policy overhang from the Beijing government’s with regards to their stance on corruption.

Action: Though we continue to be optimistic with the growth over Chinese New Year holidays in February, given the strong start of the year and as some casinos operators pointed to fully booked hotels over the holidays. We maintain our selective overweight for the sector with preference for mass market focus players with Cotai presence.