As for Macau, Beynon said the third quarter was coming in “light,” but stimulus and the holidays provide for a strong fourth quarter set up.
Macau gaming revenue through the week ending Sept. 22 is tracking at MOP 12.15 billion or ADR of MOP 552 million as VIP volume was down 11% to 13% month over month and mass was down 11% to 14% in the seasonally weaker September period that also had typhoon impact, Beynon said.
Wall Street analysts is “becoming more cautious” about Las Vegas casino earnings due to slowing leisure travel, while looking positively at Macau and Chinese economic-stimulus policies.
Channel checks suggest that foot traffic was strong for the Mid-Autumn Festival, but that visitor spend was weak. Assuming the rest of the month generates ADR of MOP 510 million to 600 million and considering the typical slowdown leading into Golden Week imply that September gaming revenue could end in the range of MOP 16.2 billion to 17 billion, Beynon said. That represents growth of 8% to 14% year over year and a drop of 14% to 18% month over month.
This would imply a third quarter Macau gaming revenue of MOP 54.5 billion to 55.3 billion, representing growth of 12% to 13% year over year and negative 2%-3% quarter over quarter.
With September revenue coming in softer than expected and impacted by typhoons, Beynon revised their industry model, and adjusted company estimates for third-quarter earnings.
Consensus currently calls for third-quarter Macau EBITDA quarter over quarter to be: Las Vegas Sands +2.4%, Wynn Resorts +3.4%, and MGM Resorts International -5.7%.
“The Chinese government announced economic-stimulus policies on September 24 that should be positive for the Chinese economy and thus Macau and we believe this has improved sentiment on Macau gaming stocks,” Beynon said.
For 2024, Beynon expects gaming revenue of -22% versus 2019 (+25% year over year). That’s $28.7 billion, with mass continuing to run above pre-pandemic levels.
“With additional operator revenue growth in mass and non-gaming, we model for margin upside despite higher opex concessionaire commitments,” Beynon said.
“Overall, we believe consensus remains conservative, particularly for Wynn, which we believe can gain share. We continue to be bullish on the long-term growth prospects for Macau and ranked Macau as our top sector in our 2024 Gaming Primer. For 2025, we continue to forecast gaming revenue -16% versus 2019 (+8% year over year), which is in line with consensus, but believe that the recently announced Chinese economic-stimulus policies could lead to upward estimate revisions.”
