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<Research>UBS: MO GGR Affected by Seasonality & Football Tournament, But Sector Outlook Still Positive
Recommend 19 Positive 48 Negative 18 |
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UBS highlighted in a report that Macau's daily average GGR was about MOP514 million over the past 7 days, or around 65% of 2Q19 levels, with mass GGR at 90-95% of 2Q19 levels, according to its channel research. This represented a decline from a daily average GGR of MOP533 million in the previous 6 days, due to seasonal factors, lower VIP room hold rates and the UEFA Euro football tournament. For the whole of June so far, daily average GGR declined 11% MoM to MOP578 million, marginally worse than the 9% MoM decline for the 2015-2019 June period. Mass GGR fell 10-12% MoM, while VIP room GGR dropped 10% MoM, with VIP room hold rates ranging from 2.6% to 2.8%. In addition, according to the broker's tracking of 33 hotels in Macau, room rates rose in the summer, with room rates per night at HK$3,400, up 4% WoW and 15% YoY. The broker expected the addition of 8 more cities to the Individual Visit Scheme (IVS) and the increase in flights during the summer to support the growth of tourists. UBS noted that the current valuation of Macau gaming stocks is equivalent to a projected EV/EBITDA of about 9.5x, which is 1.5 standard deviations below the historical average. The broker maintained a positive view of the sector, with Melco (MLCO.US) and GALAXY ENT (00027.HK) as top picks. AAStocks Financial News |
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