20171203-招商证券_香港_-Macau_Gaming__Nov_GGR_strong_on_month-end_pick-up_7页_981kb

Macau Gaming Industry Report Summary

Core Content

This report provides an analysis of the Macau gaming sector, focusing on gross gaming revenue (GGR) trends, sector valuation, and investment ratings for key companies. It highlights the performance of the industry in November 2017 and forecasts for the full year 2017, alongside a comparison of valuation metrics and company-specific performance.

Key Financial Performance

• November 2017 GGR: Increased by 22.1% YoY to MOP26,633mn, with daily GGR at MOP859mn, down 20.7% MoM.
• October 2017 GGR: Came in at the higher end of market expectations, with a 22.1% YoY growth.
• VIP Segment Growth: Estimated to have grown 30% YoY in October.
• Mass Segment Growth: Recorded 13% YoY growth in October.
• Full-Year 2017E GGR Projection: Expected to grow 19% YoY (19% YTD), with Dec GGR likely to grow 19% YoY.
• Quarterly GGR Growth: Projected to be 20% in 4Q17E, compared to 13% / 22% / 22% in 1Q/2Q/3Q17E.

Sector Valuation

• P/E Ratio: The sector is currently trading at 24x FY18E P/E, in line with its 5-year average.
• EV/EBITDA Ratio: Trading at 14x FY18E EV/EBITDA, also in line with its 5-year average.
• Valuation Insight: The report suggests that Melco Resorts is the most attractive investment due to its potential upside in full-year GGR projections and undemanding valuation.

Company Ratings and Performance

Investment Insights

• The sector has seen recovery in late October, driven by high-roller business.
• Melco Resorts is expected to outperform peers due to strong 3Q17E results and attractive valuation.
• The overall sentiment remains neutral, with no significant upside expected in the near term.
• Melco Group is also rated BUY, with a 14% upside in valuation.

Industry Trends

• The sector's performance has been stable, with no major surprises.
• The full-year GGR growth is projected to be 19% YoY, with a strong 4Q17E trend not yet fully reflected in the market.
• The VIP segment has shown stronger growth than the mass segment, with high-end GGR recovery observed post-National Congress.

Investment Ratings

• Industry Rating: NEUTRAL – Expect the sector to perform in-line with the market over the next 12 months.
• Company Rating:
  • BUY for Galaxy Entertainment, Wynn Macau, Sands China, MGM China, and Melco Resorts.
  • NEUTRAL for SJM Holdings and Melco Group.

Analyst and Regulatory Information

• The report is prepared by China Merchants Securities (HK) Co., Ltd..
• The analysis is certified by the analyst to reflect their personal views and is not influenced by compensation.
• Regulatory Disclosures are provided, indicating that the report is not directed at all investors and subject to legal restrictions in certain jurisdictions, including the United States, Japan, and Canada.

Conclusion

The Macau gaming sector is showing moderate growth and valuation stability, with Melco Resorts and Melco Group positioned as the most attractive investment options. While the sector is expected to grow in line with the market in the short term, Melco Resorts is highlighted for its potential for outperformance. Investors are advised to consider their own financial circumstances and seek independent advice before making any investment decisions.