20180706-广发证券_香港_-Macau_Gaming__June_GGR_fell_short_of_consensus,_near-term_headwinds_ahead_3页_446kb

Macau Gaming Summary

Core Content

The document provides an analysis of the gaming sector in Macau, focusing on the performance of gaming gross gaming revenue (GGR) and visitor arrivals in June 2023, alongside market outlook and associated risks.

Key Findings

June GGR Performance

• June GGR increased by 12.5% YoY to MOP22.5bn, below market consensus.
• Average daily revenue (ADR) for the last 12 days of June grew by 1.4% YoY, while ADR for the first 18 days was MOP856m, up 18.5% YoY.
• The lower-than-expected GGR is attributed to two main factors:
  • Renminbi depreciation by more than 3% against the HK dollar in the last two weeks of June, which reduced the number of chips gamblers could redeem due to their budgets being denominated in RMB.
  • Diversion of gaming expenditure to sports betting during the World Cup, which is expected to continue affecting Macau's gaming sector until mid-July.

Visitor Arrivals in May

• May visitor arrivals rose 5.2% YoY to 2.71 million, indicating a deceleration compared to March/April.
• Mainland visitor arrivals increased 9.3% YoY to 1.69 million, with ex-Guangdong visitors growing 12.2% YoY to 1.12 million.
• Hong Kong visitor arrivals declined 2.1% YoY to 645,000, contributing to the overall slowdown in visitor growth.
• Hotel occupancy in May reached 87.5%, a new post-2005 high, showing strong demand despite the visitor slowdown.

Market Outlook

• The gaming sector is expected to face near-term headwinds:
  • Renminbi depreciation may continue to impact visitor arrivals and gaming expenditure.
  • World Cup-related diversion of spending is likely to persist until mid-July.
• Visitor arrivals growth is anticipated to slow before the 3Q tourist peak season.

Risks

• Potential tightening of Macau's visa policies.
• Tougher forex controls in China.
• Implementation of a full smoking ban within casinos.
• Increased competition from casinos in other Asian countries.
• Uncertainty around casino concession extensions.

Rating Definitions

Company Ratings

Rating	Definition
Buy	Expected to outperform benchmark by >15%
Accumulate	Expected to outperform benchmark by 5%-15%
Hold	Expected relative performance between -5% and 5%
Underperform	Expected to underperform benchmark by >5%

Sector Ratings

Rating	Definition
Positive	Expected to outperform benchmark by >10%
Neutral	Expected relative performance between -10% and 10%
Cautious	Expected to underperform benchmark by >10%

Analyst Certification

The research analyst certifies that:

1. All views expressed accurately reflect his or her personal views on the company or relevant securities.
2. No part of his or her remuneration was, is, or will be directly or indirectly connected with specific recommendations or views in the report.

Disclosure of Interests

• GF Securities (Hong Kong) and its affiliates do not hold any shares of the securities mentioned.
• No investment banking relationship with the companies mentioned in the past 12 months.
• Analysts and their associates do not serve as officers of the companies mentioned and have no financial interests in the securities.

Disclaimer

• This report is not an offer to buy or sell securities.
• It is intended solely for clients of GF Securities (Hong Kong).
• The information is not guaranteed for accuracy or completeness.
• GF Securities (Hong Kong) accepts no liability for losses arising from the use of the report.
• Investments involve risks, and past performance does not guarantee future results.
• Recipients should obtain professional advice before making investment decisions.

Copyright

• This document is copyrighted by GF Securities (Hong Kong) Brokerage Limited.
• No part of the materials may be copied or re-distributed without prior written consent.

Figures

1. Figure 1: June GGR up 12.5% YoY (MOP 100m)
2. Figure 2: 6M18 GGR rose 18.9% YoY (MOP 100m)
3. Figure 3: May visitor arrivals in Macau grew 5.2% YoY (10k)
4. Figure 4: May mainland visitor arrivals in Macau up 9.3% YoY (10k)
5. Figure 5: May Hong Kong visitor arrivals in Macau down 2.1% YoY (10k)
6. Figure 6: May mainland ex-Guangdong visitor arrivals in Macau up 12.2% YoY (10k)

All figures are sourced from DICJ and GF Securities Development & Research Center.