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GGRAsia – Macau recovery story not broken, only delayed: JP Morgan

Macau recovery story not broken, only delayed: JP Morgan


Brokerage J.P. Morgan Securities (Asia Pacific) Ltd says there is still long-term value in Macau casino stocks, although the sector’s recovery is taking longer than previously forecast. The recovery has been negatively impacted by recent Covid-19 cases in mainland China’s Guangdong province, and delays in the establishment of a “travel bubble” with Hong Kong, it stated.

In a note issued on Monday, analysts DS Kim, Derek Choi and Livy Lyu stated that channel checks by the brokerage suggested that a pick-up in demand was already taking shape. “Our checks suggest upbeat summer holidays, with encouraging feedback on the level of player inquiry and booking,” the JP Morgan team wrote.

The analysts added: “We expect gross gaming revenue to resume sequential recovery path in July (+30 percent month-on-month) and print a post-pandemic high in August (+20 percent month-on-month), helping investors to regain confidence before the all-important October Golden Week”.

The latter was a reference to a holiday period encompassing China’s National Day on October 1. This is traditionally a peak season for Macau’s tourism and casino industries as hundreds of thousands of mainland Chinese tourists take advantage of the weeklong break to visit the city.

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