Macau’s gaming industry is experiencing a remarkable resurgence, prompting Citi analysts to revise their growth forecast for FY24. The latest data from the Gaming Inspection and Coordination Bureau reveals a robust performance in January, surpassing street estimates and defying expectations of a pre-Chinese New Year slowdown.
Growth Forecast Revision:
Citi analysts, George Choi and Ryan Cheung, have raised their FY24 growth forecast for Macau’s gross gaming revenues to MOP$231.3 billion (US$29 billion), representing an impressive 26% annual growth. This adjustment, up from the previous estimate of 18%, is a testament to the industry’s resilience and outperformance.
January’s Exemplary Performance:
Macau’s Gaming Inspection and Coordination Bureau reported GGR of MOP$19.33 billion (US$2.40 billion) in January, surpassing street estimates. The daily run-rate of MOP$624 million (US$77.5 million) stands as the second-highest since the reopening in January, trailing only the peak in October. This exceptional performance is attributed to factors such as high-profile k-pop concerts and sustained spending by mainland Chinese visitors.
Sustained Spending and Visitor Trends:
Analysts noted that the expected pre-Chinese New Year slowdown has yet to materialize, pointing to the impact of recent high-profile k-pop concerts in Macau. Additionally, mainland Chinese visitors continue to demonstrate both the ability and willingness to spend in Macau, contributing significantly to the sustained growth.
February GGR Forecast and Run-Rate:
Citi has revised its February GGR forecast from MOP$18.5 billion to MOP$19.5 billion (US$2.30 billion to US$2.42 billion). The average daily run-rate is anticipated to increase by 5% month-on-month, reaching MOP$655 million (US$81.3 million). Notably, it is projected to peak at an impressive MOP$900 million (US$111.7 million) towards the end of the Chinese New Year holiday.
JP Morgan’s Assessment:
In a separate note, JP Morgan echoed the positive sentiment, declaring January’s GGR result as the “best-ever January in the history of Macau” for mass demand. Analysts DS Kim, Mufan Shi, and Selina Li highlighted the impressive performance amid challenging macro and consumption environments.
Chinese New Year Outlook:
Both Citi and JP Morgan share a positive outlook for the Chinese New Year holiday period, anticipating a robust performance. Citi analysts expect over MOP$650 million (US$80.7 million) per day during the 8-day holiday, including a lull period.
Macau’s gaming industry has defied expectations and emerged stronger than ever, with a stellar January performance and optimistic forecasts for the Chinese New Year period. The sustained spending by mainland Chinese visitors, coupled with strategic events like k-pop concerts, has played a crucial role in driving the industry’s remarkable growth. As analysts closely monitor February’s developments, the trajectory suggests a resilient and thriving future for Macau’s gaming sector in FY24.