Investor sentiment toward Macau’s gaming industry remains subdued, as stable but unremarkable gross gaming revenue (GGR) has yet to spark optimism in the market, according to JP Morgan.
Analysts DS Kim, Selina Li, and Mufan Shi, however, suggest that the sector may offer value opportunities for long-term investors. “We believe the industry is gradually becoming attractive enough for strategic accumulation of select stocks,” they stated.
Among their preferred picks is Galaxy Entertainment, lauded for its strong financial position, promising growth from new openings, and strategic exposure to Thailand. MGM China was also highlighted as an “absolute value pick,” offering a dividend yield exceeding 5 percent.
Macau’s GGR Remains Stable but Uninspiring
In its latest investment memo, JP Morgan reported that Macau’s GGR for the first 16 days of March reached MOP10.1 billion ($1.26 billion), averaging MOP631 million ($78.9 million) per day. Last week’s daily revenue remained steady at approximately MOP621 million ($77.6 million).
While mass gaming revenue now exceeds 110 percent of pre-pandemic levels, VIP revenue remains weak, hovering in the low-20 percent range—similar to the trends observed in late 2024.
Despite this consistency, JP Morgan warns that “flattish demand” may not be enough to shift investor sentiment. March’s GGR is expected to remain largely unchanged from the previous year at around MOP19 billion ($2.37 billion), reflecting a marginal decline of -2 to 0 percent.
Growth Expected in Late 2025 Amid Government Caution
As a result, first-quarter GGR is projected to remain stable, even with challenging year-on-year comparisons. Analysts anticipate that growth could accelerate in the latter half of 2025, driven by easier comparisons, with full-year GGR expected to rise by a modest 3 percent.
However, concerns persist at the government level. Macau’s Chief Executive, Sam Hou Fai, has cautioned that the city’s fiscal revenue for 2025 may fall short of initial expectations, citing a sluggish start in the gaming sector.
While the government has not disclosed revised projections, its original forecast estimated Macau’s 2025 GGR at MOP240 billion ($29.7 billion)—an 11 percent increase from the MOP216 billion ($27 billion) budgeted for 2024.
With uncertainties lingering, investors remain watchful, awaiting clearer signs of momentum before shifting sentiment on the sector.
