20180605-广发证券_香港_-Macau_Gaming_Sector__May_GGR_missed,_but_visitor_arrivals_continued_to_grow_strongly_3页_478kb

Macau Gaming Sector Summary

Core Content

The report provides an analysis of the Macau gaming sector, focusing on the performance of gross gaming revenue (GGR) and visitor arrivals in May 2018, as well as the broader implications for the sector in the context of upcoming events like the 2018 World Cup and potential policy changes.

Key Performance Metrics

• May 2018 GGR Growth:
  May GGR increased by 12.1% YoY to MOP25.49bn, missing expectations.

  • The first three weeks of May showed strong ADR growth of 23.6% YoY, but this dropped to 7.4% YoY in the last 11 days of the month.
  • The decline in the latter part of May is attributed to a lower VIP win rate and police crackdowns on illegal currency exchange activities around casinos.

• Visitor Arrivals in April 2018:

  • Total visitor arrivals grew by 8.0% YoY to 2.96 million.
  • Mainland visitor arrivals increased by 16.5% YoY to 2.06 million, with ex-Guangdong arrivals rising by 18.7% YoY, being the main driver of growth.
  • Air arrivals from the mainland rose by over 50% YoY during February–April 2018, indicating strong demand from ex-Guangdong visitors.
  • Hong Kong visitor arrivals declined by 12.0% YoY in April 2018.
  • Hotel occupancy in April 2018 reached 89.5%, a 2.9pp increase from April 2017, marking a new high for the month.

Market Outlook

• The Hong Kong-Zhuhai-Macau Bridge, set to open soon, is expected to drive growth in ex-Guangdong visitor arrivals.
• Casinos with unsaturated capacity are likely to benefit from the spillover effect of rising visitor numbers.
• The 2018 World Cup is anticipated to have minimal impact on GGR and gaming company share prices, based on performance during the 2010 and 2014 World Cups.
• The low comparable base in June 2017 suggests that June 2018 GGR may maintain relatively high YoY growth.

Sector & Company Ratings

Risks

The report highlights several risks that could impact the Macau gaming sector:

• Tightening of Macau's visa policies.
• Tougher forex controls in China.
• Implementation of a full smoking ban within casinos.
• Intensifying competition from casinos in other Asian countries.
• Uncertainty around casino concession extensions.

Analyst Certification

The research analyst(s) certifies that:

1. All views expressed accurately reflect their personal views on the companies or securities discussed.
2. No part of their remuneration is directly or indirectly linked to the specific recommendations or views in the report.

Disclosure of Interests

• GF Securities (Hong Kong) and its affiliates do not hold any securities mentioned in the report.
• No investment banking relationships exist with the companies mentioned in the past 12 months.
• Analysts and their associates have no financial interests or shares in the securities discussed.

Disclaimer

• This report is solely for informational purposes and does not constitute an offer to buy or sell securities.
• The report is intended for GF Securities (Hong Kong) clients only.
• The information may be inaccurate or incomplete, and GF Securities (Hong Kong) accepts no liability for any loss arising from its use.
• Investments involve risks, and past performance does not guarantee future results.
• The report may be inconsistent with other communications issued by GF Securities (Hong Kong).

Copyright

• This report is copyrighted by GF Securities (Hong Kong) Brokerage Limited.
• No part of the material may be copied, reproduced, or re-disseminated without prior written consent.