"Big Banks" UBS: Average daily gaming revenue in Macau fell 1% month-on-month in the past seven days, dragged down by lower win rates in VIP rooms

The UBS research report indicates that channel data shows that the average daily gaming revenue in Macau over the past seven days was approximately MOP 650 million, a decline from MOP 743 million in the previous seven days, partly due to lower win rates in VIP rooms. As a result, the average daily gaming revenue for this month so far remains around MOP 696 million, representing an annual growth of about 19%, but a slight month-on-month decline of about 1%. In contrast, the same period from 2015 to 2019 typically recorded a month-on-month increase of 1%.

Specifically, the average daily gaming revenue from the mass market has grown by about 3% to 5% month-on-month so far this month, while the VIP room turnover has increased by about 4% to 6% month-on-month. However, the win rate in VIP rooms remains low at levels of 2.3% to 2.7%, compared to 2.9% to 3.3% in the previous week.

Based on market expectations, the average daily gaming revenue for December is projected to be around MOP 675 million, which means that in the remaining 17 days, the average daily revenue needs to reach approximately MOP 657 million to meet expectations. The current EV to EBITDA ratio for the sector is 9.2 times, which is 0.2 standard deviations lower than the two-year average. The bank is optimistic about Galaxy Entertainment (00027.HK), Wynn Macau (01128.HK), and MGM China (02282.HK), viewing them as industry favorites, with target prices of HKD 46.9, HKD 8.9, and HKD 20.3 respectively, all rated as "Buy."