VIP demand ‘accelerating’ with 20 pct y-o-y growth

Demand for the city’s gaming industry has been healthy so far in the month, with accelerating growth especially seen in the VIP sector, according to analysts at J.P. Morgan Securities (Asia Pacific) Ltd.
‘Based on channel checks, we estimate that VIP demand growth is accelerating to about 20 per cent [year-on-year],’ wrote the brokerage in its latest note, adding a year-on-year increase of 30 per cent or above was even registered in the top three junkets, which refers to SunCity Group, Tak Chun Group and Neptune/Guangdong Group.
‘Junkets seem to be enjoying an end demand recovery from a favourable China macro backdrop in 2016 (e.g.) property market rally, eased liquidity, commodity price hikes, fuelled by the improved liquidity and “confidence” at junkets,’ wrote the firm’s analysts led by DS Kim.
They also expect the mass market has posted a high single-digits growth to 10 per cent so far.
According to the brokerage, the city’s gross gaming revenue for the first 19 days of March is estimated to have reached some MOP12.5 billion (US$1.56 billion) suggesting daily run rate amounting to some MOP660 million month-to-date.
‘This appears solid for a “shoulder season” like March, as it is comparable to that of seasonally strong [fourth quarter of 2016] (MOP657 million per day) and meaningfully above non-holiday prints of low-MOP600million per day in recent months,’ the analysts wrote.
The firm retains its forecast for the month’s gaming revenue growth at between 10 per cent and 15 per cent year-on-year. ‘But [it] is likely to come in at the high end of the range, given [month-to-date] trends,’ it added.