According to the GICB, Macau’s gross gaming income dropped 56% year over year in December to $433 million, or 3.48 billion patacas. This was just shy of the 57% drop that was expected by most people. As traffic trends got better over time, the total for December was 16% higher than the GGR for November.
With China’s zero-tolerance COVID rules, travel limitations, and regional lockdowns all playing a significant role, Macau’s gross gaming income for the entire year fell by 51% to 42.2 billion patacas.
Macau casino Stocks Analyzed
Analysts are hopeful that GGR will significantly increase in 2023 as Macau lifts its quarantine on foreign arrivals and Mainland tourism is predicted to increase. Bank of America pointed out that China shut down its system for tracking travel history and stopped saying how many people had COVID because the information was less useful without widespread PCR testing. Most people agree that in 2023, those who run casinos that focus on serving VIPs will have slower growth rates than those who focus on serving the general public. “We think there is additional room for recovery, particularly within Mass GGR in 2023 (when we think GGR can approximate 60% of 2019 levels) and improving further in 2024 (to 90% of 2019 levels),” observed JPMorgan analyst Joseph Greff. Overall, the company views Macau stocks as strong bets on China’s reopening and has singled out Las Vegas Sands (NYSE:LVS), Wynn Resorts (WYNN), and Melco Resorts (MLCO) as outstanding options. On a valuation basis, Macau casino stocks trade at 11 times their 2024 EV/EBITDA projections, which is less than the 13 times historical average.
Stocks of casinos in Macau include Wynn Macau (OTCPK:WYNMF) (OTCPK:WYNMY), Wynn Resorts (WYNN), Sands China (OTCPK:SCHYY) (OTCPK:SCHYF), Las Vegas Sands (LVS), and MGM China (OTCPK:MCHVF) (OTCPK:MCHVY). MGM Resorts (MGM), Galaxy Entertainment (OTCPK:GXYEF), SJM Holdings (OTCPK:SJMHF) (OTCPK:SJMHY), Melco Resorts & Entertainment (MLCO), and Studio City International (MSC).
Studio City International (MSC) has the best trading momentum in the industry because its trading volume has grown by 156% over the past six weeks.
The company with the highest Seeking Alpha Quant Rating score is Melco Resorts & Entertainment (MLCO), which has a 3.38 rating. The company with the highest author consensus score on Seeking Alpha is MGM Resorts (MGM).
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