MGM China, Wynn and Melco are Macau Q3 winners - Nomura

In a note on Thrusday, Nomura previewed the third quarter results announcement season for the city’s casino operators, GGRAsia reported.

“Commentary will likely focus on continued gross gaming revenue (GGR) strength in Macau (up 22 percent for the second straight quarter, led by 35 percent growth in VIP),” the Nomura analysts said.

The team added that Wynn Macau Ltd was “likely the biggest share taker in VIP” estimating it gained 60 basis points judged quarter-on-quarter, while it thought Melco Resorts and MGM China had in likelihood gained approximately 100 basis points each in the mass segment quarter-on-quarter, noting that both those operators had experienced low hold in mass operations in the second quarter of 2017.

“All other operators should report flat to down sequential GGR share,” Nomura said expecting MGM Macau to have generated earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$131 million in the third quarter

The Japanese brokerage added it anticipated “a strong opening” for MGM Cotai. The property’s launch was previously scheduled for the fourth quarter of 2017 but has been delayed to January 29, 2018.

Nomura also expected a “strong opening” for the Morpheus hotel tower at the City of Dreams Macau casino resort. The latter is owned and managed by Melco Resorts.

Regarding Wynn Macau Ltd, Nomura estimates the firm generated third quarter EBITDA of US$305 million, helped by a “continued ramp” at its Wynn Palace casino resort in Cotai

“We assume Wynn [Macau Ltd] gains around 60 basis points of GGR share in the third quarter driven by a 60 basis point lift in VIP revenue share and 10 basis points in mass.”

Sands China Ltd meanwhile is likely to have lost share for a third consecutive quarter in the July to September period, Nomura stated.

“The key question is if [Sands China] can stabilise its market share in Macau while facing new competition from MGM Cotai and Melco Resorts/Morpheus, which we doubt,” the brokerage added.

Nomura estimated Sands China generated total EBITDA of US$638 million in the third quarter.