As far as demand is concerned, Macau gaming companies are generally optimistic about the sustainability of the recovery in midfield gaming revenue, and non-gaming activities are also increasing Macau's appeal.
The Zhitong Finance App learned that on March 20, the Statistics and Census Bureau of the Macao SAR Government released data showing that the number of inbound visitors in February this year was 3.293,600, an increase of 1.1 times over the previous year, returning to 92.9% in the same period in 2019, up 15.1% compared with January. According to the data, there were 6.155 million inbound visitors in the first two months of 2024, an increase of 1.1 times over the previous year. Zhongtai Securities said that the gaming industry is still in the recovery stage. The trend of recovering traffic is obvious, and there is strong certainty on the demand side. As the flow of people and gaming revenue continues to recover, the performance of bookmakers is also expected to gradually improve.
According to the news, the Macau Tourism Administration previously announced that starting March 6, the Mainland will add Xi'an in Shaanxi Province and Qingdao in Shandong Province as “individual tourist” cities for Hong Kong and Macao. The purpose of this adjustment is to actively expand the number of visitors, expand the mainland market, and accelerate the recovery of the tourism economy.
Judging from passenger flow data, the number of visitors entering Macau has recovered to over 90%. Combined with the March 6 New Deal, it is expected that the March data will be even more beautiful. The overall adjustment of individual gaming stocks is relatively adequate, and it is worth looking forward to generally positive expectations.
In addition, the Easter holidays are approaching. Some Macau travel agencies say that Hong Kong visitors are expected to visit during the Easter holidays this year, and there will also be quite a few mainland visitors, so the number of visitors during the holidays may increase compared to ordinary weekends. It is estimated that the average number of visitors per day will exceed 100,000. At the same time, in response to the large number of visitors from Hong Kong, I believe it will help benefit the community's SME business and stimulate the community economy.
Chairman of the Macau Travel Industry Council, Hu Jingguang said that in the past, the Easter holidays were mainly for Hong Kong visitors. Since the Easter holidays were on weekends and Sundays, I believe that when combined with mainland visitors, the number of visitors to Macau could be higher than on ordinary weekends. Currently, the average number of visitors on weekdays is about 70,000 to 80,000, and can reach 100,000 on weekends. It is estimated that the average number of visitors per day during the Easter holidays will exceed 100,000. Referring to previously published data, there were more than 550,000 visitors to Australia during the 2019 Easter holiday, or an average of about 137,500 visitors per day; during the Easter and Ching Ming Festival holidays in 2023, there were about 480,000 inbound visitors from April 5 to 10, with an average of 80,000 visitors per day.
Looking at industry data, according to data from the Macau Gaming Inspection and Coordination Bureau, Macau Lucky Gaming's gross revenue reached 18.49 billion patacas in February, an increase of 79.1% over the previous year. Judging from the degree of recovery, Lucky Gaming's gross revenue in February recovered to 72.9% in the same period in 2019. The degree of recovery fell 4.7 percentage points month-on-month, slightly lower than market expectations. Overall, gross gaming revenue in January-February totaled MOP 37.82 billion, recovering to 75.2% in 2019, which is basically the same as in the fourth quarter of '23.
UBS said that the operating expenses, competitive environment and non-gaming business development of gaming companies in Macau have turned positive, and is optimistic about the industry's prospects. As far as demand is concerned, Macau gaming companies are generally optimistic about the sustainability of the recovery of midfield gaming revenue. Non-gaming activities also enhance Macau's appeal. They prefer Sands China (01928), and focus on MGM China (02282), Galaxy Entertainment (00027), and MGM China (02282).
Related concept stocks:
Sands China (01928): DBS claims that the company is still the leader in Macau gaming stocks, benefiting from its 27% market share in the Macau midfield business, and the company's EBITDA rate is also one of the highest in the industry. The company's investment of 1.2 billion US dollars in the Londoner project, plus the completion of the renovation of the Sheraton Hotel, Conrad Hotel, and Pacifica Casino in early 2025 will enhance the customer experience and enhance appeal to high-end midmarket customers.
MGM China (02282): The company is a company engaged in the development and operation of casino lucky gaming business. It is also engaged in the operation of other casino games, related hotels and resort facilities, and the development of integrated resort businesses. The casino business operated by the company includes VIP (VIP) gaming business, main venue table gaming business, and slot machine business.
Wynn Macau (01128): In 2023, Wynn Macau received casino revenue of HK$19.111 billion, an increase of 417.18% over the previous year; total operating revenue was HK$24.268 billion, an increase of 329.99% over the previous year. Total operating revenue increased 330% from HK$5.64 billion in 2022 to HK$24.27 billion in 2023, mainly due to increased gaming volume, hotel occupancy and restaurant traffic.
Galaxy Entertainment (00027): The company develops and operates hotels, gaming and integrated resort facilities in Macau. The company's Galaxy Macau Group includes five hotels: The Ritz-Carlton Macau, Banyan Tree Macau, JW Marriott Hotel Macau, Okura Macau, and Galaxy Hotel.