by: Professional Ground expert panelists
3rd Jan 2013
Why It Will Be A Great Year for Macau Casinos In 2013
MACAU has done very well for the year 2012 amidst financial sector woos as well as China domestic market slowed down, still managed to raked in USD38 billion in annual gambling revenue.
With the high profile China leadership changes just took place two months ago, many domestic issues are yet to be resolved. But going forward into 2013, China will experience a much more solid leadership and directive from their new leader Xi JinPing.
It is envisaged that by June 2013 China will start to launch more progressive national development plans for the next 5 years. Capital market in China will receive some new policy changes including easing of credit from state-own banking system.
Under such circumstances, Macau casino landscape will only be more positive and pegs on greater domestic spending arising from China. Hence, it is expected that MACAU’s gross gaming revenue can achieve up to 20 – 25% growth rates in 2013.
VIP Gaming segment will see a more gradual slope of growth as compared to Mass gaming in the first half of the year. The revenue spread may be at the ratio of 65% VIP vs 35% Mass gaming takes. By year-ending (2013) it is envisaged that VIP gaming spread will increase significantly up to 75% of the total gross gaming revenue, setting the pace for a more aggressive 2014…
Macau however, will constantly be affected by Beijing’s policies on banking credit, property market and mainland cross-border (into Macau) opening.
Recommendations for strong buy:
- Sands China Ltd
- Wynn Resort (Macau)
With limited upside: