Macau Casino Equities Slide to Five-Year Lows as August Visitation Tumbles

A basketball hoop of Macau cassino stocks slumped to the lowest levels inwards fin years today. That’s after a research unfaltering said Aug 144 gaming revenue (GGR) and visitation are trending advantageously beneath July levels amid coronavirus-related jaunt controls.

In a short letter to clients, Bernstein analysts say GGR inward the special administrative region (SAR) for the septenary days termination Aug. 15 plunged 37 percent week-over-week, scoring the lowest hebdomadary chalk up inward nearly a year. The middling day-after-day GGR for that stop was $10 million, pile from $16 billion in the for the first time calendar week of the month.

The past week’s GGR bottomed as the travel impediments caused past Macau’s recent local COVID cases remain mostly inwards come in and [mainland] Cathay move restrictions due to its irruption had intensified,” according to the Leonard Bernstein note. “This is the lowest day-to-day GGR since late Sep (2020).”

Earlier this month, Macau officials employed “immediate pandemic prevention” protocols after a local family of iv tried and true positively charged for COVID-19. Those were the autonomous region’s first documented cases inward to a greater extent than 500 days.

Ongoing Issues for Macau

The slack arrives at a time of prolonged weakness for Macau gaming equities. It’s a scenario that’s vexing analysts and executives alike, who expected the SAR would rebound faster from the coronavirus pandemic than other major gaming markets.

That hasn’t been the case, as Macau’s retrieval efforts are stymied past pandemic-related move restrictions. The SAR hasn’t been capable to give a journey bubble with Hong Kong, and quarantine policies with an increasing identification number of cities in mainland Cathay are farther hindering rebound efforts. In a normal year, Mainland Red China and Hong Kong combine to drive home 85 percent or to a greater extent of visitors to the world’s largest cassino center.

“Macau at present has 14-day mandatory quarantine or ‘health management’ on travelers from districts inward to a greater extent than 30 cities of 11 provinces in Red China (but sevener cities of four provinces were removed from the lean o'er the past week),” said the Leonard Bernstein analysts. “The current COVID state of affairs inwards People's Republic of China testament utmost at to the lowest degree a month with disrupted locomote to Macau.”

The explore house estimates the SAR’s Aug GGR will come inward 80 percent beneath the August 2019 mark, while declining 50 percent on a month-over-month basis.

Prolonged Slump for Macau Casino Stocks

The aforementioned weakness inwards Macau gaming equities pertains to Hong Kong-listed shares of the SAR’s concessionaires. But that slack is on video display with some of the US-listed names.

For example, Wynn Resorts (NASDAQ:WYNN), which, inward a normal operating environment, derives two-thirds or to a greater extent of its revenue and earnings before interest, taxes, wear and tear and amortization (EBITDA) from its two Macau avenues, is sour 18.15 percent year-to-date. The inventory resides at its lowest levels since cobbler's last December and trades 38.33 percent infra its 52-week high.

Down almost 20 percent o'er the yesteryear month and nearly 36 percent year-to-date, Las Vegas Sands (NYSE:LVS) – the largest Macau operator — trades at its lowest levels since the starting of the pandemic. The LVS drop-off is at present so lengthy it’s ane of simply a fistful of S&P 500 members that haven’t posted gains since the Mar 23, 2020 market bottom.