SJMHY - Macau casinos post strong growth in May as the post-pandemic turnaround picks up

2023-06-01 08:20:15 ET

Macau casinos generated gross gaming revenue of 15.57B patacas ($1.93B) to mark growth of 366% year-over-year from a year ago and set a new post-pandemic high. The May GGR tally was up about 5.7% from the April total.

For the first five months of 2023 combined, Macau’s GGR is up 173% year-on-year to 64.93B patacas ($8.05B).

The 366% GGR growth for May just missed the consensus estimate of +370%. Roth MKLM analyst Edward Engel and team attributed the slightly underwhelming results to a rebound in COVID cases across China, as well as a key Mainland official visiting Macau last week. "Given that we believe both of these headwinds are transitory, we would be buying the dip for Las Vegas Sands ( LVS ) and Macau stocks, particularly given regional COVID waves seem to be easing," read the firm's latest update.

Of note, Q1 earnings results from Macau operators wwere strong with five clean beats and an in-line report from Wynn Macau ( OTCPK:WYNMF ). Looking ahead, Bank of America analyst Ronald Leung noted hotel room capacity should increase 25% quarter-over-quarter in Q2 and another 15% in Q3. Part of that extra capacity will be from Las Vegas Sands' ( LVS ) new The Londoner, which is a British-themed luxury casino resort that opened last week. The $2B resort is expected to be a major draw for tourists with its long list of non-gaming attractions.

Macau casino stocks: Wynn Macau ( OTCPK:WYNMF , OTCPK:WYNMY ), Wynn Resorts ( WYNN ), Sands China ( OTCPK:SCHYY , OTCPK:SCHYF ), Las Vegas Sands ( LVS ), MGM China ( OTCPK:MCHVF , OTCPK:MCHVY ). MGM Resorts ( MGM ), Galaxy Entertainment ( OTCPK:GXYEF ), SJM Holdings ( OTCPK:SJMHF , OTCPK:SJMHY ), Melco Resorts & Entertainment ( NASDAQ: MLCO ), Studio City International ( MSC ).

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