Analysts raise January gaming revenue forecast to $2.23 billion for Macau casinos

According to industry reports, Macau's Gross Gaming Revenue (GGR) for the initial 14 days of January amounted to MOP8.6 billion ($1 billion). The average daily GGR for the past week stood at MOP600 million ($74.4 million), reflecting a 5% decrease from the first week of January.

According to Citi research, Macau's VIP GGR has remained relatively steady month-on-month in recent weeks, Macau Daily Times reported. Taking these trends into account, Citi has conservatively revised its January 2024 forecast from MOP17.5 billion ($2.17 billion) to MOP18 billion ($2.23 billion), roughly 72% of the levels observed in pre-pandemic January 2019. This suggests an estimated average daily GGR for the remainder of January 2024 at approximately MOP553 million ($68.6 million).

Similarly, JPMorgan reports Macau's GGR for the initial 14 days of January as MOP8.6 billion, or MOP614 million per day. This implies a daily GGR of MOP600 million for the last week, markedly lower than during the New Year's holiday. Despite this, JPMorgan characterizes the performance as robust in a seasonal context, the report said.

JPMorgan's expectations for January GGR align with market projections, ranging between MOP17.5 billion to MOP18 billion. Despite macroeconomic challenges, the outlook for Macau's casinos in the Year of the Dragon remains optimistic, according to JPMorgan.

In a separate research report, Morgan Stanley expresses continued positivity towards Macau's gaming industry, predicting that gaming companies will outpace China's consumer market in earnings. The brokerage suggests that industry valuations have declined excessively. Key considerations for stock selection this year will center around market share trends and corporate operating leverage levels, the report said.

Morgan Stanley notes the strong performance of casino stocks in the first half of 2023, but a loss of momentum in the latter half, resulting in a 15% decline for the year and underperforming the HSI by about 2 percentage points. Significant growth is anticipated in GGR this year, with strong expectations for the mass market business. Predictions indicate a 25% year-on-year growth for annual mass GGR and a 34% growth for industry EBITDA.