International edition
October 20, 2021

Says Deutsche Bank

Macau: Golden Week VIP demand appears solid

(Macau).- Macau analysts have been worried that Chinese tourists may not turn up during the first week of October, or the Golden Week, when the entire China is on vacation. In recent conversations with their industry contacts, Deutsche Bank was surprised to find that high-end gamblers may still be coming to Macau.

H

ere is analyst Carlo Santarelli:

"While forward bookings generally mean little to nothing in Macau, we were surprised to hear that high-end demand appears solid for the upcoming Golden Week period. In an admittedly unusual twist, contacts expressed surprise that high-end players have actually called in advance for reservations, despite historically, just arriving with the expectation of service."

Macau names have been sold off since weaker-than-expected July gross gaming revenue came out. In the last three months, Las Vegas Sands fell 13.2%. Melco Crown dipped 13.2%. Wynn Resorts retreated 6.7%. MGM Resorts was down 2.7%. 

Among the Macau names, Wynn is Deutsche’s preferred stock. Santarelli explained why:

Net-net, we continue to see WYNN as the best way to express a somewhat contrarian positive view of Macau at present given its: 1) meaningful mass market outperformance relative to the market, 2) potential upside margin momentum stemming from mass growth in conjunction with VIP declines, 3) a lower, relative to peers, level of negative estimate revision risk, 4) continued high end strength in Las Vegas, some of which seems to be at the expense of Macau, and 5) a Cotai project which has shown little evidence it will miss management’s targeted opening dates.

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