"Large Banks" Huizheng: The Spring Festival passenger flow demonstrates the resilience of tourism consumption, maintaining "Buy" ratings for Sands China, Galaxy Entertainment, and MGM China

HSBC Global Research report indicates that Macau's total revenue (GGR) for the first 22 days of this month is MOP 14.3 billion. In other words, including the Spring Festival holiday golden week (February 15 to 23), Macau's average daily revenue is MOP 786 million. The average daily revenue showed slow performance in the first three days but accelerated in the last three days to about MOP 1.2 to 1.3 billion, approximately 10% to 15% higher than the same period last year.

The research also pointed out that during the past weekend, the number of visitors to Macau increased by 13% to 14% year-on-year, with the average daily visitor count for the first eight days rising about 7% year-on-year, compared to a 4% year-on-year decline in the same period last year. So far this month, Macau's mass market average daily revenue has decreased by 10% to 12% month-on-month (down 15% to 17% in the previous week), while VIP room transaction volume has decreased by 8% to 10% month-on-month (down 18% to 20% in the previous week). The overall VIP room win rate remains slightly below normal levels, around 2.6% to 2.9% (compared to 2.2% to 2.4% in the previous week). The research assumes that if the average daily revenue for the last six days is MOP 650 million to 750 million, the gross gaming revenue for the first two months of this year will record a year-on-year growth of 7% to 9%.

The research maintains a "Buy" rating on Sands China (01928.HK), expecting that its ongoing efforts to expand market share will continue to yield results, with a low valuation, forecasting a price-to-earnings ratio of 14.8 times this year, corresponding to a 27% profit growth; it is also optimistic about Galaxy Entertainment (00027.HK), anticipating that the JW Marriott Hotel will continue to attract high-end demand, especially with its strong events; and retains a "Buy" rating on MGM China (02282.HK) due to its low valuation, forecasting an enterprise value to EBITDA of about 8 times this year, with a dividend yield of about 5%. Below are the research's ratings and target prices for Macau gaming stocks:

Stock | Investment Rating | Target Price (HKD)