Understanding the Market | Gambling stocks lead the decline, the suspension of satellite casinos has limited impact on leading companies, and Macau previously lowered its annual gross gaming revenue forecast
Gaming stocks generally fell, with PARADISE ENT down 8%, Sands China down 4.13%, MELCO INT'L DEV down 3.21%, and MGM CHINA down 2.74%. The three licensed gaming companies in Macau will cease operations of 11 satellite casinos by the end of 2025, and the satellite casino model will exit the market. CITIC Securities believes that this event will have a limited impact on leading companies. The Macau government has lowered its forecast for gross gaming revenue in 2025 from MOP 240 billion to MOP 228 billion, with the annual growth rate reduced from 5.8% to 0.5%
According to Zhitong Finance APP, gaming stocks are among the biggest losers. As of the time of publication, Paradise Entertainment (01180) is down 8%, trading at HKD 0.92; Sands China (01928) is down 4.13%, trading at HKD 14.86; Melco International Development (00200) is down 3.21%, trading at HKD 3.32; MGM China (02282) is down 2.74%, trading at HKD 10.64.
In terms of news, three gaming companies in Macau will terminate the operations of a total of 11 satellite casinos by the end of 2025, marking the official exit of the satellite casino model from history. CITIC Securities pointed out that the complete closure of satellite casinos differs from market expectations, but considering that the GGR of satellite casinos only accounts for a low single-digit percentage of the industry in 2024, and that satellite casinos are mainly located on the Macau Peninsula, they believe this event will not disrupt leading operators.
In addition, the Macau government recently lowered its forecast for the total gross gaming revenue for 2025 from the original HKD 240 billion to HKD 228 billion, with the expected annual growth rate reduced from 5.8% to 0.5%, averaging about HKD 19 billion in gross gaming revenue per month. According to data from the Macau Gaming Inspection and Coordination Bureau, the total gross gaming revenue for 2024 is projected to be HKD 226.78 billion. He Yanmei, Deputy Director of the Macau Financial Services Bureau, stated that this adjustment in the gross gaming revenue budget mainly considers global economic uncertainties and changes in tourist gaming consumption patterns
