Goldman Sees Macau GGR Recovery In August, Keeps Buy Ratings On Casino Stocks

Goldman Sachs said Macau gaming revenue recovered sharply in August after the World Cup, with average daily gross gaming revenue rising to MOP710 million to MOP720 million and the year-on-year decline narrowing to 1%, according to ETNet. The bank said traffic at local casinos was strong during its visits, with operators using free drinks and snacks to attract visitors. For the first six days of September, average daily gaming revenue eased to MOP633 million, flat from a year earlier. If the rest of September stays at MOP630 million a day, total monthly gaming revenue would reach MOP18.9 billion, up 3% year on year. Goldman expects third-quarter gaming revenue to be flat quarter on quarter and down 2% year on year at MOP61 billion, while fourth-quarter industry revenue and EBITDA could rise 3% and 5%, respectively. Goldman said competition in the premium mass segment remains intense, but reinvestment by operators has stabilized. It highlighted Galaxy Entertainment and Sands China as beneficiaries of higher summer market share, and said Galaxy's Phase 4 potential has yet to be reflected. The bank also expects Sands China's gaming revenue and EBITDA market share to recover in the second half, sees Wynn Macau's 7% dividend yield as attractive, and maintained buy ratings on the stocks. It also kept buy ratings on MGM China and Melco Resorts, noting MGM's valuation is not high but uncertainty remains over a potential change in control at its parent, while Melco's short-term gaming momentum is weak even as its REM hotel is set to open later this year.