The Macau operator's "unfavored holdings" in casino games in February will not only "dwarf" its earnings before interest, taxation, depreciation and amortization (EBITDA) but also "fall out," Citigroup is previewing first-quarter earnings for the sector.
"In reflection of this negative operating leverage, we estimate that Macau's industrial EBITDA will improve only 2% quarter-on-quarter in the three months to March 31, slightly above $2.02 billion," analysts George Choi and Ryan Cheng wrote.
This comes despite the fact that first-quarter GGR increased by about 5.9% sequentially, from MOP 54.11 billion in the fourth quarter of last year to less than MOP 57.33 billion ($7.11 billion).
Citigroup expects Win Macao Inc WYN to "probably benefitted from luck" as the company gained 1.7 percentage points sequentially to 15.1% in the first quarter and was "relatively unscathed in February's ill-fated month."
The organization expects MGM China Holdings Ltd. to gain 0.7 percentage points of share sequentially in the first quarter to hit 17.0 percent. Analysts said a Bruno Mars concert at MGM Cotai in January "helped" increase MGM Cotai's share.
Citigroup mentioned an update on MGM China's early adoption of Radio Frequency Identification (RFID) technology for operating game tables, a trend that is shaping up in the Macau market, according to a public statement from the operators.
"We believe technological advantages over peers are sustainable for most of this year thanks to the early adoption of smart gaming tables," the brokerage said.
"The market share of Grand Lisboa Palace remains around 2%," Citigroup said, referring to SJM Holdings' Kotai flagship Grand Lisboa Palace and first-quarter earnings, adding that the property's trading volume "has improved noticeably."
Citigroup said Sands China Inc. was likely included among its first-quarter market share "donors," with Slices falling 2.0 percentage points sequentially to 23.4%, "likely hit by unfavorable holdings."
Galaxy Entertainment Group Ltd was expected to shed 0.8 percentage points to 17.1%, due to "the impact of large-scale concourse renovations in Galaxy Macau before the Chinese New Year's Golden Week." This was a reference to a re-editing of the main gaming ground of the group Kotai flagship before the peak Lunar New Year holiday season in mainland China, Macau's main tourism supply market.
"We do not believe that Melco's stake has changed significantly," Citigroup added, referring to Melco Resorts & Entertainment Inc.
Deutsche Bank Securities mentioned a 14.6% market share of Melco Resorts for the full year of 2023.
BY: 바카라사이트