With April GGR coming in slightly above consensus, the strength of Macau’s gaming revenue growth for the month of May will come down to the current Golden Week holiday period with analysts remaining conservative in their early forecasts.
In a Thursday note following publication by Macau’s DICJ of the April results – which saw GGR grow by 1.7% year-on-year to MOP$18.9 billion (US$2.36 billion) – Seaport Research Partners said they forecast May revenues to grow by 5.2% month-on-month, lower than the historical May average 8.9% growth. This would represent a 1.7% decline compared with May 2024.
However, Seaport’s Vitaly Umansky acknowledged that this was a conservative estimate with upside potential depending on the performance of Golden Week.
Likewise, expectation that GGR will show 3.4% growth for FY25, driven by higher growth in the second half of the year, could also be improved upon depending on the impact of Beijing’s stimulus and policy measures, which Umansky says are likely to help China’s economy and improve consumer confidence later this year.
He also reiterated the importance of the base mass market in driving further Macau revenue growth given that it continues to lag the post-COVID recovery of the premium gaming segment.
“While Macau’s premium segment has been strong following recovery from COVID that began in early 2023, the base mass segment has been stubbornly weaker than anticipated,” he said.
“Overall Mass GGR is currently running at around 112% of 2019 while VIP sits at around 26%. Within mass, premium is around 45% above 2019, while base mass continues to lag, nearly 20% below 2019. And, importantly, within base mass, while day-tripper business from HK and Guangdong is likely back to near pre-COVID levels, overnight base mass (destination base mass) has been weak, likely well below 70% of pre-Covid levels.
“In order to drive growth in 2025 and 2026, base mass recovery will be key.
“We forecast 3.4% year-on-year growth for 2025, with upside surprise possible on a turnaround in the Chinese economy and consumer sentiment (which could drive upside in base mass). We forecast increasing GGR growth of around 7% in 2026-2027, but this could be higher on a stronger Chinese economy, materially improved consumer sentiment and any appreciation of the RMB.
“However, we expect to see share shift, with Sands and Galaxy gaining share, while MGM and Wynn are likely to be the largest share donors over the next two years.”
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