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Shares of Macau casino operations continue to rally in Hong Kong on Tuesday, with Melco International Development surging 10.83% as of 10:27 am local time, Wynn Macau up 7.2%, MGM China gaining 5.8%, SJM Holdings up 4.35%, Sands China up 1.2%.
The existing COVID-19 border control measures for Macau will soon be relaxed and the resumption of e-visa (electronic Individual Visit Scheme) and group tours could be realized as soon as early November, said Macau’s Chief Executive on Saturday.
The announcement is the most significant policy easing since the Macau-China border was reopened more than two years ago and at least some Macau gaming operators can turn EBITDA positive in the fourth quarter of 2022, J.P.Morgan said in a note. It should have an immediate impact with mass GGR tipped to recover to 25% to 30% of pre-COVID levels in 4Q22 and then ramping up sequentially to around 85% by the end of 2023, and it should also be enough to see at least some concessionaires return to profitability before 2022 is out, it said. Read more …
The relaxation in the anti-epidemic measures attested Beijing’s policy support for Macau’s economy and would serve as a positive news for the city’s gaming sector, UBS said.
Macau’s gross gaming revenue in Q4 is expected to reach 40% of 2019-level and its 2023 and 2024 GGR is expected to reach 70% and 105% of 2019-level, it said. The sector top picks remain Sands China and Melco Resorts & Entertainment Ltd, both rated at Buy, with a target price of HK$23.7 and US$13.3, respectively, said the bank.
