As per global financial services firm JP Morgan’s estimates, gaming operators in Macau may have garnered gross gaming revenues worth approximately MOP$4.55 billion ($565 million) during the five-day Golden Week holiday from May 1 to May 5.
Operators made approximately MOP$910 million ($113 million) on average per day, which has surprised analysts, exceeding earlier predictions of no more than MOP$850 million ($106 million) per day.
In a note released on Monday, the investment bank attributed the stronger-than-expected performance to the “quality” of players visiting Macau, despite somewhat underwhelming total visitation numbers. If accurate, the estimate represents a 5% to 10% increase above expectations and is 5% faster than recent recovery trends.
Analysts DS Kim, Mufan Shi, and Selina Li noted that the robust figures imply mass gross gaming revenue reaching 120% of pre-COVID levels, with VIP revenue returning to 30%. However, they caution against extrapolating Golden Week data for the remainder of May.
“This divergence here happens as the industry’s recovery stabilizes after a year of a ‘re-opening rally’, in turn making idiosyncratic factors (market shares, opex control, promotions) the key earnings driver, in our view. We expect diverging earnings revision trends into and post-1Q results, which should create alpha opportunity within the sector,” the note said.
The analysts predicted double-digit EBITDA growth for Macau concessionaires Wynn Macau and SJM Resorts in their upcoming first-quarter 2024 results. However, Galaxy Entertainment Group is expected to report a sequential pullback in EBITDA.