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# Analysts disagreed with the idea that June could end Macau's slump

Investment analysts covering the Macau gaming sector are divided over whether the Macau casino sector will be able to record monthly sales growth that could end the downturn that began in June 2014.

Union Gaming Securities Asia Ltd predicts Macau's casino gross gaming revenue (GGR) could post less than 1% year-over-year growth in June, with other brokerages suggesting a contraction of between 1% and 8%.

Official data on Wednesday showed Macau casino GGR fell 9.6% year-on-year in May, marking the 24th straight month of declines. On a monthly basis, the GGR increased by 6.0%.

"Given June, we see no reason why the current GGR should not match the daily rates of MOP580,000 [US72,500] reported in months other than recent holidays," Union Gaming analyst Grant Gobersen wrote in a note on Wednesday.

He added: "This will result in a total GGR of $17.5 billion ($2.2 billion) in MOPs, the first year-over-year increase in 24 months. The GGR is expected to fall to mid-single digits in July and August before returning to growth in September."

Mr Govtsen said the GGR trend in Macau during the fall was likely to be positively affected by the opening of Win Palace and Paris Macau, respectively.

U.S.-based Wynn Resorts and its subsidiary Wynn Macau have yet to provide a date for when the under-construction Wynn Palace casino resort will open in the third quarter. The project was scheduled to start on June 25, after plans to start on March 25 were canceled.

Sheldon Adelson, chairman and chief executive officer of Sands China Ltd, said in a conference call with investment analysts in April that his company aims to open $2.7 billion Paris Macau in Kotai in mid-September.

It's still in the red

Deutsche Bank securities analysts Carlo Santarelli and Danny Baloy are not as optimistic as Union Gaming about June's performance in the Macau gaming segment. The two analysts said in a note on Wednesday that they expected the market consensus to fall only 6.9% year-on-year, noting that May's GGR trend was worse than investors expected.

Mr. Santarelli and Mr. Baloy added that June's GGR growth is likely to improve compared to May's year-on-year performance, but is still in negative territory.

They wrote. "Over the past four years, June's average daily win is down 8.4% from May. If we assume an 8.4% sequential decline in May's victory every day during the 30-day period of June, we would expect a decline of about 6% year-on-year for the month."

"June could print its worst monthly GGR in 70 months," JP Morgan said in a note Wednesday. The investment bank expected Macau's June GGR to fall between 5% and 7% year-on-year to between 16 billion and 16.4 billion, the lowest monthly GGR tally since September 2010, it added.

Cameron McKnight of Wells Fargo Securities LLC also estimated in a note Wednesday that the GGR would continue to decline in June, measured year-on-year.

"June growth is expected to be -7% year-on-year, up from -1%. This assumes that average daily sales at the same store in June will trend with historical seasonality… Our estimate represents daily revenue of approximately $540 million to $570 million."

Brokerage Stern Age CRT also expected Macau's June GGR to continue to decline between 5% and 8% year-on-year.

"Discussions with the company's management suggest there is a real improvement in mass play offset by a drop in VIPs, which provides a positive profitability mix shift," Telsey Advisory Group LLC analysts David Katz and Brian Davis wrote in a note dated Wednesday

However, they said, "We acknowledge that there are fewer negative factors to market activity, but we focus on significant supply growth going forward and the demand needed to support it, which is not clear at this time. We are cautiously optimistic that demand trends will improve as supply increases."  [슬롯사이트 순위](https://www.slotplayground.com/)

