UBS Group issued a research report stating that their channel investigation has shown that the average daily gambling revenue (GGR) in Macau last week (July 8th to 14th) was 0.636 billion patacas (the same below), higher than the 0.55 billion yuan in the first week of this month, partially due to high win rates in VIP rooms.

The report states that last week's gambling revenue was about 84% of the level of the third quarter of 2019; the mid-term gambling revenue is about 110% to 115% of the level of the third quarter of 2024. The average daily gambling revenue from the beginning of the month to the present is 0.593 billion yuan, an increase of 10% year-on-year and an increase of 1% quarter-on-quarter. Among the various sub-markets, the mid-term GGR decreased by 0% to 2% per month, while the VIP room fell by 1% to 2% per month, with a win rate of about 3.6% to 4.0%.

UBS believes that Macau's law enforcement work to crack down on illegal currency exchange is still ongoing, which may drag the demand for high-end mid-term gaming in the short term. However, the increase in the capacity of Hong Kong and Macau's individual tourist flights and the end of the European Cup may partially alleviate the related impact. The current EV/EBITDA of the gambling industry is about 9.1 times in 2024, which is 1.8 standard deviations lower than the long-term historical average. UBS maintains an optimistic attitude towards the industry and prefers MGM Resorts (MLCO.US) and Galaxy Entertainment (00027.HK). (js/w)

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