Macau Casinos: Analyst Warns of Slow Start to Golden Week (MGM) (LVS) (WYNN) (MPEL)

Analyst Karen Tang of Deutsche Bank thinks the quality of visitors to Macau casinos declined sharply at the start October due to the "Occupy Central" protest.

"As a result of the "Occupy Central" protest, Chinese visitors to HK fell 2% yoy on 1st Oct. Since 20-25% of Chinese visitors to Macau also visit HK on the same trip, the protest in HK is also hurting Chinese visitation to Macau, which only grew 2% yoy on 1st Oct, much worse than in previous years (16% yoy in 2013). That said, total visitation to Macau rose 10% yoy as more HK people went to Macau. But most importantly, we feel the quality of visitors deteriorated. Many VIPs and premium mass players cancelled their trips, forcing casinos to comp rooms to lower-tier players. We think a sharp slowdown in mass rev gth in Sept-Oct will be the next disappointment," she said.

"After the “Occupy Central” protest started on 28th Sept, some premium mass players cancelled their hotel room bookings in Macau for Golden Week (Oct 1-7). Casino hosts had to comp the rooms to lower-tier players, often to those from HK. The deteriorating quality of mass players will likely lower table yield. Yesterday, we noticed a lot more low-end (HK$500 min bet) tables at Venetian than in previous years. In fact, since early Sept, casino hosts had noted a sharp slowdown in visitation by high-end premium mass players as these players also wanted to stay low profile (similar to VIPs) in the anti-corruption climate," she added.

In the US traders are watching Las Vegas Sands (NYSE: LVS), MGM (NYSE: MGM), Wynn Resorts Ltd (NASDAQ: WYNN), and Melco Crown (NASDAQ: MPEL).

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