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Strong 1Q18 results as Macau data shows mass up 20% and VIP up 21%

Monday, 16 April 2018 18:57
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Gaming data released by Macau’s Gaming Inspection and Coordination Bureau (DICJ) on Monday shows strength across the board in 1Q18 with mass and VIP growing at an almost identical rate at 20.1% and 21.0% respectively.

Keeping track sequentially at 5.8% growth for mass and 5.7% for VIP, the segments were also split down the middle in terms of revenue contribution at between US$4.4 billion and US$4.5 billion each according to estimates.

The remarkably similar results are important, according to Macau-based analyst Grant Govertsen, who said, “This is good news on dual fronts: 1) VIP growth remains strong yet not sky high and therefore is more sustainable from a business perspective while also being more politically acceptable, and 2) the profit engine that is the mass market segment is more robust than many had given it credit for when the year began and remains robust as summer approaches.”

The best performing game type of all was non-VIP baccarat, up 24% year-on-year and 7% sequentially, reflecting a surge in tourist arrivals to start the year including a 36% increase in Chinese tour group visitation.

Govertsen, though, notes the trend towards Cotai with an estimated 62% of total GGR generated in Cotai or Taipa.

“At the segment level, 64% of mass GGR was generated on Cotai (vs 36% on the peninsula), while 59% of VIP GGR was generated on Cotai (vs 41% on the peninsula),” he said.

“We expect the delta between Cotai and peninsula to widen slightly this year even as we expect GGR on the peninsula to experience high single digit growth.”

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