The release of Galaxy Entertainment Group’s 2Q17 financial results on Thursday – the last of Macau’s six concessionaires to do so – saw Macau’s Gaming Inspection and Coordination Bureau announce a combined 34.8% increase in VIP revenue and 7.0% increase in mass table revenue for the quarter. But Union Gaming’s Macau-based analyst Grant Govertsen says those figures are not an accurate reflection of the city’s revenue split due to a reclassification of some mass tables as VIP that began in late 2014.
Instead, Govertsen puts the true level of mass market revenue growth for 2Q17 at 14.8%, with VIP adjusted slightly down to +30.8%.
“Mass market continues to anchor Macau’s ongoing recovery with five consecutive quarters of year-on-year growth as per Big 6 data,” he said.
“On the flipside, the DICJ numbers have, on average, overstated the VIP growth rate by 460 bps over the same period, with 2Q17 slightly below this average.”
Govertsen added that Galaxy remains the strongest long-term option for investors given it comfortably out-performed its rivals in mass market with 2Q17 growth of 18.2%, “with the rest of the Big 6 between +2.7% and -5.9%.
“It is due to this mass outperformance in the face of new competition, along with new hotel (and other non-gaming) supply over the medium term, that Galaxy remains a top pick of ours as the best way to play the ongoing Macau recovery,” he said.
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