A New Macau

Macau emerged from the Covid-19 pandemic in incredibly good shape. The unexpected pace of recovery was complemented by a positive change in market dynamics and an improving mood in China. IAG looks at the situation in more detail.

It has already been a year and a half since Macau's borders reopened, and the story of the recovery is almost complete. Total gaming revenue for 2023 is $183. 1 billion (US$22. 7 billion), equivalent to 62. 6% of pre-Covid levels. As of the end of April, the current fiscal year was more than 76% of the 2019 upper limit, and March recorded the highest monthly GGR indicator since the pandemic, surpassing $19. 5 billion (JPY2. 42 trillion). Most analysts predicted that the March indicator could be surpassed, but at the time of publication, DICJ data had not yet been released. (That could bring in $20 billion (US$2. 52 trillion).)

The Macau government has remained typically conservatistic in its 2024 GGR forecasts, last November pegging gambling revenues at about US$216 billion (US$2. 68 trillion), but the strong start to the year has given analysts reason for optimism for the industry.

In April, international brokerage CLSA said it was raising its SGR forecast by 3. 5 percent to US$3. 3 billion through 2024, which would be 34 percent annualized and 83. 5 percent of 2019 SGR.

CLSA analysts noted at the time that Macau’s “stability” and “well-positionedness” give the Macau SAR, which targets just 2 percent of mainland China’s population, the most scope to expand its share.

But GGR is only half the story.

Such high profitability has already forced two concessionaires, MGM China and Wynn Macau, to resume dividends a year earlier than expected, with Galaxy Entertainment Group also resuming dividends in 2023 thanks to significant reserves.

In its comments, Morgan Stanley noted that it expects the companies to first focus solely on reducing their debt burdens and paying dividends at the end of 2024 or 2025, and that MGM and Wynn's unexpected moves "suggest leadership confidence in using cash to simultaneously manage three types of cash": reducing debt burdens, operating liabilities, capital costs related to concessions, and dividends.

The investment bank also estimates the eBitDa of the 24th fiscal year of more than $ 8 billion.

Macau's gambling corporate shares are stubbornly recovering, but the sentiment has definitely improved in terms of profits and EBITDA prisms.

For several years before the discovery, the Macau gambling industry was concerned about the fact that the crackdown on Chinese docks and cros s-border gambling became a bigger concern. Of course, Beijing arrested Ervina Chaw, a boss of San City, who had been in Macau for 18 years in Macau for organizational crime and illegal gambling, and in January 2022, Taku Chun in Macau for 14 years. It can be said that he made a statement by arresting Leo Chang, a general manager. In August 2020, the Ministry of Culture and Tourism of China announced the "blacklist" of foreign tourist destinations for weakening casinos for tourism and mainland China.

The ministry did not specifically named the area corresponding to this "blacklist", so there was a controversy over whether Sarah Macau could be applicable.

Nevertheless, on January 8, 2023, when the border regulations were almost eliminated, the behavior of mainland China was mostly positive against Macau.

In February, the People's Republic of China announced that it has newly added two cities, Sien and Cindao, on a list of citizens who are qualified to travel to Macau and Hong Kong, based on the Individual Trips Program (IVS). The IVS was developed in 2003 to promote two special administrative district sightseeing in 2003 after the epidemic of the unlimited pneumonia, and residents on the mainland, as expected, members of the business visa and tourism groups. You can travel individually, not. Since the liberalization of the IVS casino industry, it has been one of the most important factors for visiting Macau, and by 2023, 56 % of the mainlands and 70 % of nearby Cantonese travelers. It is said to visit.

In May, the State Agency added an additional eight cities to IV: Sanishi Province, Inner Mongolia Autonomous Region, Halbin City, Tibetan Autonomous Region Lhasa City, Jinshin Province, Shinin Province, Nishifue Autonomous Region Intuan City, Xinjiang Uigur Autonomous Region. Urumuchi City. < SPAN> The investment bank also estimates ebitDa in the 24th fiscal year of more than $ 8 billion.

Macau's gambling corporate shares are stubbornly recovering, but the sentiment has definitely improved in terms of profits and EBITDA prisms.

For several years before the discovery, the Macau gambling industry was concerned about the fact that the crackdown on Chinese docks and cros s-border gambling became a bigger concern. Of course, Beijing arrested Ervina Chaw, a boss of San City, who had been in Macau for 18 years in Macau for organizational crime and illegal gambling, and in January 2022, Taku Chun in Macau for 14 years. It can be said that he made a statement by arresting Leo Chang, a general manager. In August 2020, the Ministry of Culture and Tourism of China announced the "blacklist" of foreign tourist destinations for weakening casinos for tourism and mainland China.

The ministry did not specifically named the area corresponding to this "blacklist", so there was a controversy over whether Sarah Macau could be applicable.

Nevertheless, on January 8, 2023, when the border regulations were almost eliminated, the behavior of mainland China was mostly positive against Macau.

In February, the People's Republic of China announced that it has newly added two cities, Sien and Cindao, on a list of citizens who are qualified to travel to Macau and Hong Kong, based on the Individual Trips Program (IVS). The IVS was developed in 2003 to promote two special administrative district sightseeing in 2003 after the epidemic of the unlimited pneumonia, and residents on the mainland, as expected, members of the business visa and tourism groups. You can travel individually, not. Since the liberalization of the IVS casino industry, it has been one of the most important factors for visiting Macau, and by 2023, 56 % of the mainlands and 70 % of nearby Cantonese travelers. It is said to visit.

In May, the State Agency added an additional eight cities to IV: Sanishi Province, Inner Mongolia Autonomous Region, Halbin City, Tibetan Autonomous Region Lhasa City, Jinshin Province, Shinin Province, Nishifue Autonomous Region Intuan City, Xinjiang Uigur Autonomous Region. Urumuchi City. The investment bank also estimates the eBitDa of the 24th fiscal year of more than $ 8 billion.

Macau's gambling corporate shares are stubbornly recovering, but the sentiment has definitely improved in terms of profits and EBITDA prisms.

For several years before the discovery, the Macau gambling industry was concerned about the fact that the crackdown on Chinese docks and cros s-border gambling became a bigger concern. Of course, Beijing arrested Ervina Chaw, a boss of San City, who had been in Macau for 18 years in Macau for organizational crime and illegal gambling, and in January 2022, Taku Chun in Macau for 14 years. It can be said that he made a statement by arresting Leo Chang, a general manager. In August 2020, the Ministry of Culture and Tourism of China announced the "blacklist" of foreign tourist destinations for weakening casinos for tourism and mainland China.

The ministry did not specifically named the area corresponding to this "blacklist", so there was a controversy over whether Sarah Macau could be applicable.

Nevertheless, on January 8, 2023, when the border regulations were almost eliminated, the behavior of mainland China was mostly positive against Macau.

In February, the People's Republic of China announced that it has newly added two cities, Sien and Cindao, on a list of citizens who are qualified to travel to Macau and Hong Kong, based on the Individual Trips Program (IVS). The IVS was developed in 2003 to promote two special administrative district sightseeing in 2003 after the epidemic of the unlimited pneumonia, and residents on the mainland, as expected, members of the business visa and tourism groups. You can travel individually, not. Since the liberalization of the IVS casino industry, it has been one of the most important factors for visiting Macau, and by 2023, 56 % of the mainlands and 70 % of nearby Cantonese travelers. It is said to visit.

In May, the State Agency added an additional eight cities to IV: Sanishi Province, Inner Mongolia Autonomous Region, Halbin City, Tibetan Autonomous Region Lhasa City, Jinshin Province, Shinin Province, Nishifue Autonomous Region Intuan City, Xinjiang Uigur Autonomous Region. Urumuchi City.

This then happened with the announcement by the Macau government that from May 6, groups of tourists will be allowed to carry out a certain number of trips between the peninsula and Macau, which will in fact be possible to use the proposal of rooms in another Hancin hotel.

In his own comments, seaport research analyst Vitaly Umansky said that in fact, these political measures "are likely to have a more consistent effect, with the highest probability, on popularity and GGR, but on long occasions are considered positive reasons for the subsequent rise in traffic."

Umansky still has similar statements from mainland authorities, such as the fact that "how these political measures are considered clear evidence that the Chinese government continues to support Macau (and not compare it with the gambling industry) should help to raise votes." "

"We are waiting for the continuation of the region's active financial politicians, which is necessary, in fact, to promote the simplification and improvement of transportation communication, people's movement, investment, cross-border financial jet. For a long time, we will not entertain visa politicians to weaken and perhaps request funds in the region of the huge bay.

It seems that a whole century has actually been held since the Macau-Government in December 2022 approved, in fact all six concessions of the metropolis will receive fresh 10-year gaming concessions - brought a well-deserved relief, but at least a share recipe of anxiety.

Among the whole series of fresh laws and claims introduced in the framework of the re-tender to the concession, there was a significant reduction in the influence of satellite casinos Macau, Dzhanket and measures to close the model of claims from the direction of the concession, the entire period of exposure to the concession disguised a total non-gaming commitment to pay at least 108, 700 million PHOP (13, 500 million USD).

It also said that in the first five years of the concession, the GGR of the artel-industrial sector was 100% of Macau's It was discussed that these non-gaming pledges would increase by 20% if the $180 billion mop-up were to be surpassed. Last year, in year one of the 10-year concession period, GGR increased to MOP183. 1 billion ($22. 7 billion).

The concessionaires seized the opportunity to expand their own non-gaming propositions at a time when they were already very secure. Certain attention was paid to what some call Macau's fresh "concert economy": last year, an overestimated interest in cool ideas led to a visible increase in the popularity of the gaming business and, according to some experts, profits.

In the middle of 2023, not only the influence of 12 performances by Hong Kong artist Jacky Chong in Venetian Macau, but also the Black Pink Group and Studius in the Galaxy Arena, Leon Rai in Hong Kong, and discussed JP Morgan DS Kim and MUFAN Dee. It is actually displayed, "They draw the necessary images of a player (expensive) who have a player from the database of similar real estate Sands Marina Bay Sands [Singapore], in fact, Artel GRGR-. You can increase the industry.

"These entertainment events are also moving the Macau gambling needles as wel l-at the same time, in our view, we predict the recovery of the Macau Global Business (Haruka) of the value that existed before COVID. I am.

Baddy Lamb, Galaxy-Entertainment-Group-Collective Cabinet Vice President, vice president of the people in the collective cabinet, is actually the most likely profit from the "non-aged investment planning plan last year. In secret, they contribute to the increase in foot traffic, the number and the profit of the gambling business.

As a matter of course, the main mass of the stalls is transmitted to the original consumption costs that are unique to the first tallying: Melco-Resorts is ready to give the famous house-of-Dancing-Water-Show House. After a break for more than four years, Win, Back, Win and MGM announced the intentions of personal shows, and Sands China has been conducting all comprehensive reconstruction of Kotai-Arena in real time. 。

"The parent company Las Vegas Sands, President Sands China, and COO, said Patrick Dumon::

If this is realized, it will become an unimaginable hig h-quality arena, and will have unprecedented facilities. "

"This can increase market competitiveness, and can be expected to improve the quality of tourists from the conventional market, for example, for example, guarantee high quality tourism in our major customer base. You can grow the number of repeat visits by our hig h-cost customers.

The consecralism, who once transferred a considerable share of the VIP IGR to the internal bazaar, and the conconsionaire who moved the player to a very intelligent global premium class sector, was still needed. Both options are important conditions for such a need for a positive effect on the margin to compare with DZHANKET, and that the EBITDA recovery rate is important to keep up with the GRR collection rate. There is.

The problem of satellite was more problematic. Last year, the government chose a model that would abolish the satellite in the next three years, and instead chose a model that would continue to operate without participating in conventional interest distribution. The result will be a solution, but the number of satellite has already decreased from 18 to 11 since the Macau New Gambling Law enforcement on January 1, 2023.

The government's government, which has obtained a license from most of the closed Casa satellite and is still in charge of 9 satellite out of the remaining 11 satellite, cannot simply discard a resigned casino employee in a landfill. From a standpoint, he undertook the main significance of closure. As a result, in August last year, the company stated that the company had an additional 2. 150 additional employees at the time, which had a "ove r-funded salary" of about 169 million dollars ($ 21. 6 million) in the quarter. 。

This problem is still going on. After SJM has already announced the 1Q24 financial results, Umananski of Seaport pointed out that "the satellite business has not been profitable because of the continued cost of closing casinos."