Macau Gaming Concessionaires Outperform with 6% EBITDA Surge

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As the final quarter of 2023 unfolded, the six Macau gaming concessionaires saw their combined earnings before interest, taxes, depreciation, and amortization (EBITDA) climb by 6% in aggregate, outperforming expectations. The surge was predominantly spearheaded by SJM Holdings and Wynn Macau, positioning themselves at the forefront of this financial uptick.

Citi analysts George Choi and Ryan Cheung provided a lucid analysis, indicating that despite Sands China and Galaxy Entertainment ceding portions of their market share during this period, their rivals have seized the opportunity to fortify their positions. This shuffle in market dynamics, though seen as luck-driven, might herald longer-term implications for EBITDA margins for companies such as MGM China, Melco, Wynn Macau, and SJM, potentially leading to a bullish sentiment in share prices.


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Wynn Macau, a subsidiary of the global Wynn Resorts, and Sands China, the progeny of Las Vegas Sands, are notable movers in the industry, with MGM Resorts International also maintaining a majority stake in MGM China. Such affiliations highlight a deep interconnectedness within the sector’s corporate structures.

Despite a collective gross gaming revenue (GGR) of $22.7 billion in 2023, these operators remain below the high watermark set in 2019 of $36.3 billion. This discrepancy points towards a significant recovery potential for the Macau market in the Special Administrative Region (SAR) through the coming year.

Companies like Melco Resorts & Entertainment and Wynn Macau have deftly pivoted away from traditional VIP-centric models, a strategic move amid Macau’s faltering junket industry. Their refocus on the premium mass market segment appears to have paid dividends, catering to an audience considered by many analysts to be far more stable than the standard mass gamblers.

Anticipating margins to hover around 28.5% for the fourth quarter, the same as the previous one, the Citi analysts elaborated that shifts in EBITDA margins were less about player reinvestment and more reflective of shifts in market share among the operators.

SJM and Wynn Macau, in particular, were expected to be the standout performers with respect to EBITDA growth. In the larger outlook, Macau casino stocks stepped into 2024 at leading discounts, considering the previous year’s lackluster performance across the sector.

Despite this, the market’s value perception has reached a point where experts see an overestimation of economic downturn scenarios. This, combined with attractive valuations, forms a premise for a positive perspective on Macau stocks, resulting in Citi revising upward price targets on several key players while maintaining a favorable long-term outlook on others.

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