JP Morgan: Macau on the Path of Strong GGR Result in June

The recovery of the gambling industry in Macau will continue into June, suggests a Monday note by JP Morgan Securities (Asia Pacific), citing the return of live concerts and its impact on mass market gross gaming revenue (GGR).

Daily Run Rate Increased

Using weekly data, JP Morgan analysts DS Kim and Mufan Shi outlined that the daily run rate for the past seven days increased from MOP$530 million ($66 million) in the prior period to MOP$570 million ($71 million) per day, and compensating to the slower than expected start of the month and bringing the June total GGR to MOP$9.5 billion ($1.18 billion).

Considering the trend since the beginning of June, Kim and Shi believe that their previously issued monthly forecast of between MOP$14 billion ($1.74 billion) and MOP$14.5 billion ($1.8 billion), which translates to between MOP$470 million ($58 million) and MOP$480 million ($60 million) per day, “may prove too conservative.”

“..we would not be surprised if June bucks the weak seasonality to print better than MOP$500 million ($62 million) per day,” Kim and Shi added, pointing out that casinos could post strong second-quarter results and beat the market consensus, with mass GGR and EBITDA recovering over 80% and 65% of pre-pandemic levels, respectively.

Live Concerts Behind the Recovery

JP Morgan analysts see the return of live concerts to the SAR in recent months as one of the major factors stirring the industry recovery, citing the short-term residency at The Venetian Macao’s Cotai Arena of Jacky Cheung.

“It appears the Jacky Cheung concert at Sands’ Venetian continues to attract the right type of – read ‘high-value’ – players, including those from the database of Sands’ sister property Marina Bay Sands,” Kim and Shi wrote in the memo, outlining that this “in turn helps to lift overall industry GGR.”

Hong Kong singer and actor Cheung delivered a series of 12 concerts at the Cotai Expo at The Venetian Macao casino resort between June 2 and June 9. Besides Cheung, there was a series of 14 concerts by Cantopop artist Leon Lai Ming at the casino resort promoted by Melco Resorts, Studio City, spanning across May and the first half of June, as well as several concerts by South Korean K-pop group, Blackpink.

Shi and Kim further wrote that these events “do seem to move the needle for gaming business in Macau – at least thus far – which bodes well for Macau’s mass business to recover well beyond pre-Covid levels, in our view.”

Pointing to the increase in the daily run rate ever since these events took place, Kim and Shi believe that the industry would post another impressive result in June and pick up right where it left in May.