JPMorgan published a report indicating that Macau's gambling revenue in December last year decreased by 2% year-on-year to 18.2 billion Macau patacas, slightly lower than market expectations of 18.5 billion to 18.8 billion Macau patacas, meaning recovery to 80% of pre-pandemic levels, with a full-year recovery to 77% level. According to market segmentation, the bank estimates that mass market gambling revenue will recover to about 110% of pre-pandemic levels, while VIP room gambling revenue will recover to about 23%, slightly lower than recent performance.

However, Macau's gambling revenue in the fourth quarter last year grew by 6% year-on-year to 57.4 billion Macau patacas, the highest in 20 quarters, and recovered to 80% of pre-pandemic levels. According to market segmentation, the bank estimates that mass market gambling revenue (including slot machines) increased by 6% year-on-year, reaching a record high (or 112% of pre-pandemic levels), while VIP room gambling revenue remained stable, still about 24% of pre-pandemic levels.

The bank maintains its forecast for Macau's gambling revenue to grow by 5% this year, with the industry's top pick being Silver Entertainment (00027.HK), followed by a bullish outlook on MGM CHINA (02282.HK), WYNN MACAU (01128.HK), and Sands China (01928.HK), then followed by SJM (00880.HK) and Melco International (00200.HK).

Stocks | Rating | Target price (HKD)

Silver Entertainment (00027.HK) | Shareholding | 48 yuan

Sands China (01928.HK) | Shareholding | 24 yuan

MGM CHINA (02282.HK) | Shareholding | 14 yuan

WYNN (01128.HK) | Shareholding | 7.7 yuan

Melco Resorts and Entertainment (MLCO.US) | Neutral | 7 dollars

Sands China (00880.HK) | Neutral | 3 dollars

Galaxy Entertainment (00200.HK) | Shareholding | 4.5 dollars