With the Golden Week holiday crowds subsiding, and to a lesser extent the visit of Premiere Li, average daily gaming revenue (GGR), excluding slots, declined 50% w-w to HK$450mn over 11-16 October, according to Nomura.
Assuming average daily GGR (ex-slots) of HK$500-560mn for the remainder of the month (versus HK$544-563mn in July to September), it would imply October GGR of HK$20.3-21.2bn (up 4-9% y-y and 14-19% m-m), largely inline with Nomura's original estimate of 3-10% y-y growth.
Nomura said the 50% w-w decline in gaming revenue after golden week again raises concerns on the sustainability of the GGR improvement seen over the past three months. The detention of 18 Crown Resorts employees in China could negatively impact the future performance of the high-end gaming segment for the regional casino operators, including those in Macau as marketing to these international gamers becomes increasingly challenging.
The research house believes that Macau stocks as we believe improving industry fundamentals have already been priced in, with the sector trading at peak-cycle valuation of 15x 2017 EV/EBITDA.
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