Investment bank JP Morgan is maintaining its forecast for Macau-wide GGR to grow by 5% in 2025, despite gaming revenues having fallen short of consensus in December.
Macau’s Gaming Inspection and Coordination released its December and FY24 GGR numbers on Wednesday, with the final month of the year seeing revenues fall almost 3% short of consensus at MOP$18.2 billion – making it the third weakest month of 2024. It was also the only month to see a decline compared to the same month in 2023.
However, with analysts having predicted some softness in December due to the visit of China’s President Xi Jinping for the inauguration of new Macau Chief Executive Sam Hou Fai, JP Morgan said its forecast for 2025 remains unchanged at 5% GGR growth.
“We didn’t have to change our forecasts despite well-documented consumption and macro headwinds, as Macau demand has been (surprisingly) in-line thanks to a solid recovery in visitation and thus also in grind/base mass (which we estimate recovered to 90% to 95% in Q4),” said JP Morgan’s DS Kim, Mufan Shi and Selina Li.
“This probably reflects a series of visa easing during 2024 and a variety of non-gaming events/projects, which, in our view, should continue help driving visitation/grind mass recovery into 2025 and offsetting a possible peaking out of high-end demand.
“This makes us comfortable staying with our +5% GGR assumption without assuming any meaningful inflection in macro backdrop.”
The analysts also note that, even with a softer December, Q4 still generated the highest GGR in 20 quarters – up 6% year-on-year and 3% quarter-on-quarter to MOP$57.4 billion. Mass GGR grew by 4% quarter-on-quarter to an all-time high at 112% of pre-COVID levels while VIP was flat at around 24% of pre-COVID.
Separately, Citigroup said in a Wednesday note that it expects January 2025 GGR to reach around MOP$19.0 billion (US$2.37 billion), down 2% year-on-year due to the timing of Chinese New Year in late January, which typically sees a slowdown in the weeks prior.
However, January and February combined are tipped to grow by 6% year-on-year with GGR for the first two months of the year to reach around MOP$40 billion (US$5.0 billion).
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