UBS: Macau gaming revenue declined after Golden Week, preferred Sands China (01928) and MGM China (02282)

The Zhitong Finance App learned that according to the bank's channel survey, since yesterday, the average daily gaming revenue (GGR) for the past eight days was about MOP 613 million, lower than the average daily average of about MOP 729 million in the previous seven days; the bank favors Sands China (01928) and MGM China (02282) as the sector's preferred stocks, all rated as “buy”. The target prices are HK$15.90 and HK$13.60, respectively.

The bank pointed out that this has caused GGR to average about MOP 742 million per day since this month, down about 5% year on year and up about 23% month on month, lower than the sellers' unanimous expectations of about 777 million patacas per day (same as year on year). The base effect for the rest of the month seemed challenging, averaging about MOP 770 million per day in the same period last year.

The bank continued that in terms of business segments, the daily revenue operating rate of midfielders increased 20% to 23% month-on-month, VIP room daily transcoding yield increased 18% to 22% month-on-month, and the VIP room win rate was 3.0% to 3.3%.

The bank also updated the ratings and target prices of other shares in the sector. Galaxy Entertainment (00027) has a target price of HK$44.40 and Macau International Development (00200) of HK$4.30, all of which are “buy”; the target price of Wynn Macau (01128) is HK$5.70 and that of Aobo Holdings (00880) is HK$1.50, all of which are “neutral”.