"Big Banks" UBS: The backgrounds of high-end gamblers in Macau are more diverse and their financial conditions are better, which helps support gambling demand

A survey by UBS targeting high-end mid-market gamblers in Macau found that new customer sources are emerging in the industry, including high-income professionals; gamblers also come from more diverse industries, such as hardware technology and pharmaceuticals. Although the macroeconomic environment is unfavorable, more gamblers reported an improvement in their financial situation over the past 12 months and expect further improvement in the next 12 months, which helps support the resilience of gaming demand. The bank now expects total gaming revenue (GGR) and EBITDA in the gaming industry to grow by 5% and 11%, respectively, by 2026.

Additionally, the survey results show that high-end gamblers place greater importance on factors such as rebates and membership programs, hotel room quality, and high-end dining options. The bank believes that high-end gaming companies are better positioned to effectively capture the demand of this customer segment. Focusing on high-end marketing, developing gambler incentive measures, and enhancing product positioning strategies will help high-end gaming companies stand out and improve their ability to expand market share.

In terms of stock selection, the bank's top picks are Galaxy Entertainment Group (00027.HK), WYNN MACAU (01128.HK), and MGM CHINA (02282.HK), with target prices of HKD 46.9, HKD 8.4, and HKD 19.8, respectively, all rated as "Buy."