Morgan Stanley worsened its forecast for Macau casinos for 2021
Analysts of one of the most reputable banking groups in the world Morgan Stanley revised their previous forecast for the development of the gambling Macau market in 2021. The agency said that "Chinese Las Vegas" will have gross revenues of only $24 billion and an earnings before all expenses (EBITDA) of $6.4 million.
Importantly, the new The gross revenue estimate (GGR) of the Chinese gambling industry is 65% of total revenue in 2019. At the same time, these figures are lower than the previously estimated growth by 70%.
Weakened VIP segment was cited as one of the reasons for the downgraded forecast. Its revenue should be 40% of 2019 levels, while Macau's mass gambling market earnings are expected to reach only 80%. Accordingly, according to analysts, the VIP segment will continue to drag the overall GGR down.
In addition, China recently approved new penalties for those mainland citizens who organize gambling abroad. The law will go into effect March 1.
According to analysts at Morgan Stanley, “A third of Asian gambling revenue comes from outside Macau, some of which is contributed by Chinese consumers and may return to Macau, and a recently unveiled criminal legislation makes it difficult for foreign countries to attract Chinese clients. All this will also have a negative impact on the financial performance of the industry in 2021.
However, despite not the most optimistic forecasts, Macau's gross gambling income in 2022 could reach $47 billion. Some gambling establishments have plans to expand, which could increase demand and drive up share prices.
Analysts added: “Stocks tend to rise 6-12 months before casinos open. We expect 2021 to be an important year in which the prerequisites for a return to normality will lead to an increase in the securities of Macau casinos.
Напомним, казино Великобритании снова оказались в изоляции.