Each month we track several indicators, which have historically led Macau GGR growth. The data points for the most recent month show 12 of the 19 y/y indicators are better than the prior month versus 7 of 19 last month, but we’d still call the data soft and mixed. We chart all 19 of the indicators, and we show a summary table in Exhibit 2.
Search Coverage List, Models & Reports
Search Results1-10 out of 110
The U.S. ISM manufacturing PMI has been in a downtrend for the last year, and this week it fell below the key 50 level for the first time since August 2016. In this week’s piece we examine the implications for our coverage by looking at industry stock returns over the last 25 years in relation to when PMI drops below 50 as well as when PMI eventually bottoms.
Macau August GGR was released overnight (9/1/19) showing a decline of -8.6% y/y, versus the Consensus Metrix average estimate of -3.2%. The month was likely negatively impacted by several factors, including the Hong Kong protests; Typhoon Wipha, which may have had a small impact on the first day of the month with public transportation canceled; Typhoon Lekima hitting the eastern coast of mainland China the weekend of 8/9-8/11; and a meaningfully weakening CNY/HKD throughout the month, as a weaker local CNY reduces the purchasing power of Chinese residents when they go to Macau (+0.48 correlation to Macau GGR, we have found). We think consensus assumed these impacts would be modest, but in reality they may have had a bigger affect than people expected.
This is a recurring piece we write monthly where we track several key monthly indicators, which have historically led Macau GGR growth. The data points for the most recent month show 7 of the 19 y/y indicators are better than the prior month versus 7 of 19 last month, too. We chart all 19 of the indicators, and we show a summary table in Exhibit 2.
Macau July GGR was released overnight showing a decline of -3.5% y/y, versus the Consensus Metrix average estimate of +0.7%. It seems like GGR may have deteriorated as the month progressed due to softer VIP volumes in the wake of Suncity’s reported involvement in proxy betting in mid-July; Hong Kong protests probably didn’t help; and then Typhoon Wipha may have had a small impact on the last day of the month, but Wednesday is a trough day of the week and the storm didn’t appear to be as problematic as potentially thought, so any impact to July may have been small. Our gaming summary file with all historical data is updated and included in the model link.
MLCO reported a positive 2Q result this morning. Property EBITDA of $442M beat our $371M and consensus of $387M. VIP hold positively impacted results by $53M, implying the core beat was only small. However, a one-time impairment hurt EBITDA by $12M, and the provision for the labor bonus was accelerated and hurt by an additional $8M more q/q, meaning the core result seems even better. The stock didn’t react much today, implying to us buy-side expectations were already high after a nice run-up into the print.
This is a recurring piece we write monthly where we track several key monthly indicators, which have historically led Macau GGR growth. The data points for the most recent month show only 7 of the 19 y/y indicators are better than the prior month versus 10 of 19 last month, though in many cases the y/y data points in the recent month were only marginally worse or marginally less positive than the prior month. We chart all 19 of the indicators, and we show a summary table in Exhibit 2.
For our Weekly Sho we've recorded a 20-minute video with 36 slides highlighting our current views as we head into another earnings season. The cruise line section begins at 4:03, the lodging section begins at 9:00, and the gaming section begins at 15:40. Enjoy the rest of your weekend!
Our coverage is up 24% YTD, on average, which is modestly outperforming the market. However, our coverage remains 21% below 2018 highs, on average, and also 10% below 2019 highs, on average, all while the market is near an all-time high. Our coverage mostly remains out-of-favor, in our opinion, but we see some opportunities. Within lodging our best idea is VAC. Within gaming our best idea is ERI. And within cruise our best ideas are RCL/NCLH.
- 1 of 11
- next →