"Big Banks" JP Morgan: Macau's February gaming revenue is mixed; slightly adjusts monthly forecast; preferred is Galaxy Entertainment

JP Morgan published a research report indicating that, according to its verification, the total gaming revenue in Macau for the first 22 days of February was MOP 14.3 billion, averaging MOP 650 million per day. Last week's average daily revenue, which included the quiet and peak periods of the Lunar New Year holiday, was MOP 785 million, lower than the bank's expectation of MOP 850 million.

The bank stated that the performance at the beginning of the holiday was sluggish, with an average daily revenue of about MOP 450 million for the first 4 to 5 days, recording a double-digit year-on-year decline. However, starting from the 6th day, activity surged, with daily gaming revenue exceeding MOP 1.2 billion, indicating a year-on-year growth of 10% to 15%. The holiday is not yet over, and the next few days are crucial; the "post-holiday demand" phase typically sees high-end players accelerating their spending. The bank will have a comprehensive understanding of the situation after obtaining full-month data over the weekend.

In light of the mixed performance during the Lunar New Year, the bank has slightly adjusted its total gaming revenue forecast for February to be flat to a 2% increase year-on-year (previously forecasted to grow by 2% to 5%). Excluding seasonal and calendar factors, it is expected that total gaming revenue will grow by 12% to 13% in the first two months of 2026 (previously forecasted to grow by 13% to 14%), which aligns with the bank's and market's industry forecasts.

JP Morgan updated its latest preference order for Macau gaming stocks. The top choice is Galaxy Entertainment (00027.HK), rated "Overweight"; followed by MGM China (02282.HK), also rated "Overweight"; Sands China (01928.HK) and Wynn Macau (01128.HK) follow closely behind, both rated "Overweight." Melco Resorts & Entertainment (MLCO.US) is rated "Neutral," while Melco International Development (00200.HK) and Austar International Holdings (00880.HK) are both rated "Underweight."

The bank advises investors to maintain selectivity in the Macau market, focusing on the consensus risks and valuation levels of individual stocks, rather than waiting for a broad revaluation