GGRAsia – Macau VIP 2Q negligible for casino profits: JP Morgan
Macau VIP 2Q negligible for casino profits: JP Morgan
Macau’s VIP gross gaming (GGR) revenue for the second quarter was estimated by a brokerage at only around 20% of pre-pandemic levels, and “virtually negligible for industry profits and cash flow. “.
JP Morgan Securities (Asia Pacific) Ltd gave its opinion in a note on Thursday, following the official release of GGR figures for June, which showed last month’s tally – including mass market and VIP games – down 37.4 percent month after month.
DS analysts Kim, Derek Choi and Livy Lyu wrote of the second quarter as a whole: “VIP GGR shows no signs of improvement at only around 20% of recovery levels, as in the first quarter. “
They added, “We note that mass / location is now 77% of GGR, making the VIP segment virtually negligible for industry earnings and cash flow. “
The official split between VIP and mass segments for the second quarter has yet to be released by the Macau government.
JP Morgan estimated the second quarter GGR VIP at MOP 5.73 billion (US $ 716.3 billion) and the mass market GGR, including slots, at nearly MOP 19.65 billion. .
The brokerage said the second quarter “still managed to print the highest GGR since the pandemic, thanks to a robust May and a strong mass recovery.”
Analysts said second-quarter GGR stock was up 7% quarter-on-quarter to MOP 25.4 billion. This represented an “execution rate of MOP 279 million per day and a recovery of 35% from the second quarter of 2019”.
The team added regarding the three months up to June 30: “By segment, we estimate that the GGR mass increased by 13% quarter over quarter to reach around 45% in the second quarter before Covid , a further recovery of around 40% in the first quarter. “
JP Morgan said he was not changing his forecast for July, “despite recent reports that a Hong Kong-Macao travel bubble can be launched in mid-July ”.
Currently, only mainland China has a largely non-quarantined travel bubble with Macau.
JP Morgan analysts said of a possible further easing of travel arrangements: “We are keeping our forecasts unchanged given the unpredictability of these policy measures.
“As such, we model the GGR as being from MOP 8.5 billion to MOP 9.0 billion in July, only 35% from pre-Covid levels, similar to April,” said added the institution.
Carlo Santarelli, of Deutsche Bank Securities Inc, observed in a memo Thursday after Macau’s June GGR result, that he now forecast a third-quarter GGR in Macau to reach $ 4.28 billion, from a previous estimate of $ 4.70 billion.