类别：投资策略 机构：金英证券(香港)有限公司研究员：金英证券(香港)研究所日期：2014-10-08
Sep 14 Macau GGR fell 12% YoY. Oct 14 likely to be still challenging.
That said, anti-graft drive may be winding down and mortgage ruleshave been substantially relaxed.
Stay OVERWEIGHT. Sector trading at below five-year mean. Top Picksare Galaxy Entertainment Group and Sands China.
What’s New
Sep 14 Macau GGR fell 12% YoY to MOP25.6b, bringing 9M14 GGR toMOP275.9b (+6% YoY). We believe VIP GGR was hurt by falling propertyprices and the anti-graft drive. Meanwhile, we believe mass market GGRgrowth continued to slow due to transit visa curbs (effective 1 Jul 2014)and anti-graft drive hurting the premium mass segment.
What’s Our View
While Oct 14 Macau GGR is most likely to be higher MoM due to the GoldenWeek holidays, we are unsure how it will fare YoY. The third CommunistParty Plenum (20-23 Oct 2014) may defer gambling plans by VIPs.
Furthermore, mass-gaming floors went smoke free yesterday. We estimatethe smoking ban will negatively impact mass market GGR growth by~13ppts at most.
That said, the Communist Party seemed to suggest the anti-graft drive maybe wound down in the near future. In addition, the PBOC has relaxedmortgage rules. These two key factors have the ability to arrest the wealthdestruction that has been negatively impacting VIP and premium massgamblers. We continue to believe Macau GGR growth will re-accelerategoing forward due to: (i) improving Chinese liquidity; (ii) stabilisingproperty prices; and (iii) new casino builds.
The average 12-month forward EV/EBITDA for Macau concessionaires isalready below its five-year mean at 11.3x and approaching -1SD to its fiveyearmean of 10.3x, suggesting downside risk is narrowing. StayOVERWEIGHT. Top Picks remain Galaxy Entertainment Group and SandsChina.
