September Looking Strong for Macau Casinos, October Expected to Be Record Breaking -Analyst
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Rating Summary:
27 Buy, 12 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 10 | Down: 11 | New: 7
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Analysts at Deutsche Bank commented on Macau gaming stocks Tuesday, noting that strength continues in September.
Month-to-date (through 9/26), gross revenue in tracking at approximately 738 million patacas per day and has remained steady throughout the month, the firm notes.
While month-to-date is strong, they would not be surprised to see daily run rate slip into the end of the month as junket operators curtail capital to prepare for the upcoming Golden Week holiday.
Deutsche Bank continues to expect year-over-year gross gaming revenue growth come in within the +40-45% range.
While the 738 million pataca daily run rate in September is down about 8% from 738 million in August, the firm does not believe there to be any softness in the market and attribute the decline to some VIP hold issues at two properties. In the past two years, September gross gaming revenue dipped 3% from August levels, as daily run rates were effectively flat. Also, rolling chop volume in September, 2009 was down 8% from August, 2009 and rolling chip volume in September, 2010 was down 10% from August, 2010.
The firm believes market share to be tracking as follows during the month: SJM Holdings 29.3%, Las Vegas Sands (NYSE: LVS) 13.6%, Melco Crown Entertainment Ltd. (MPEL) 17.5% (boosted by hold), Wynn (Nasdaq: WYNN) 11.1% (hampered by hold), MGM (NYSE: MGM) 9.7%, and Galaxy 18.8%.
Overall, Deutsche Bank believes September is largely in-line with investor expectations and they continue to expect a record breaking month in October.
The firm continues to recommend owning Macau operators (LVS/WYNN) into the seasonally strong 4Q, which they expect to be a catalyst for upward market forecast estimate revisions.
Month-to-date (through 9/26), gross revenue in tracking at approximately 738 million patacas per day and has remained steady throughout the month, the firm notes.
While month-to-date is strong, they would not be surprised to see daily run rate slip into the end of the month as junket operators curtail capital to prepare for the upcoming Golden Week holiday.
Deutsche Bank continues to expect year-over-year gross gaming revenue growth come in within the +40-45% range.
While the 738 million pataca daily run rate in September is down about 8% from 738 million in August, the firm does not believe there to be any softness in the market and attribute the decline to some VIP hold issues at two properties. In the past two years, September gross gaming revenue dipped 3% from August levels, as daily run rates were effectively flat. Also, rolling chop volume in September, 2009 was down 8% from August, 2009 and rolling chip volume in September, 2010 was down 10% from August, 2010.
The firm believes market share to be tracking as follows during the month: SJM Holdings 29.3%, Las Vegas Sands (NYSE: LVS) 13.6%, Melco Crown Entertainment Ltd. (MPEL) 17.5% (boosted by hold), Wynn (Nasdaq: WYNN) 11.1% (hampered by hold), MGM (NYSE: MGM) 9.7%, and Galaxy 18.8%.
Overall, Deutsche Bank believes September is largely in-line with investor expectations and they continue to expect a record breaking month in October.
The firm continues to recommend owning Macau operators (LVS/WYNN) into the seasonally strong 4Q, which they expect to be a catalyst for upward market forecast estimate revisions.
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