Morgan Stanley expects Macau's total gaming revenue in the first quarter to increase by 18% year-on-year, optimistic about Galaxy Entertainment and Sands China, among others

Morgan Stanley's research report indicates that Macau's total gaming revenue in January this year was MOP 22.6 billion, representing a year-on-year growth of 24% and a month-on-month growth of 8%, exceeding market expectations. Additionally, since the Lunar New Year holiday on the 8th falls entirely in February, it is expected that the month will gain additional growth momentum, with an estimated year-on-year revenue growth of 22%.

Morgan Stanley expects that Macau's total gaming revenue in the first quarter of this year will grow by 18% year-on-year, due to a low base in the first four months of 2025. Furthermore, although the market shows concerns about weakened profit margins and promotional activities at the end of last year, a stronger performance in the first quarter of this year should drive upward revisions in profit expectations. They also believe that the current enterprise value multiple (EV/EBITDA) of 8.1 times remains attractive.

Among gaming stocks, Morgan Stanley is optimistic about Galaxy Entertainment (00027.HK), rating it "Overweight"; Sands China (01928.HK), rating it "Overweight"; and Melco Resorts & Entertainment (MLCO.US), rating it "Overweight." They give MGM China (02282.HK) a "Neutral" rating; and SJM Holdings (00880.HK) a "Underweight" rating