n fact, the company’s share price has been increasing ever since it posted better-than-expected third-quarter 2013 figures. Casino operators yielded an impressive year-over-year return of 100.2%.
According to China’s Gaming Inspection and Coordination Bureau, Macau, the largest and most profitable gaming destination in the world, has recorded casino revenues of us$ 45 billion in 2013, up 18.6% year over year. Exclusively for the month of Dec 2013, Macau reported gaming revenues of us$4.1 billion, reflecting an annual growth of 18.5%.
MGM Resorts derives nearly 32% of its revenues from Macau. Hence, the company is expected to gain immensely from Macau’s impressive sales performance.
MGM has been taking initiatives to increase revenues and junket productivity in Macau. The VIP business in Macau, which witnessed a slowdown owing to a weakening Chinese economy in early 2012, appears to be back on track since fourth-quarter 2012. Management anticipates a positive trend in Macau in the ensuing quarters buoyed by a gradual recovery in VIP gaming, upgrades to main gaming floor products and substantial growth in Macau mass market gaming revenues.
MGM Resorts is also progressing well with its casino-hotel development project in Macau’s Cotai Strip. We believe the company’s Macau business will receive a boost from the opening of the Cotai Strip property in 2015, which in turn will help it to increase market share in the region.
Additionally, the company is benefiting from the improving Las Vegas business. Visitation in the city remains strong, suggesting its recovering from the recession.