Excessive optimism in the price. The sector is currently trading at -17% since Jan 20; even GGR is -65% from the pre-COVID-19 level. While market has been hopeful on the vaccine, we believe challenges remain: (1) even with the vaccine, visibility remains low in 2H, depending on coverage (likely ~40% by year end), effectiveness, and production and (2) medium term, structural headwinds including regulatory, weaker VIP system impairing capital flow, mix change of players towards mid-end mass would drag recovery.
Key differentiating ideas: (1) COVID-19 is not the key constraint: China domestic intra province travel resumes, but visits to Macau are still fairly low despite zero new local infection cases for more than nine months. We believe that a key constraint now is not the COVID-19 test, but regulatory. On the ground, we hear that frequent gamblers are taking a longer time to obtain visas, money flow is still tight, and junket credit extension is cautious.
(2) Regulatory tightening is ongoing: China’s newly amended criminal law, which includes casino operation and cross-border (Macau included) gambling facilitation, will be effective 1-Mar-2021. Many junkets and premium mass hosts plan to limit their China visits.
(3) Consistent low VIP hold may indicate that VIP rolling may not reflect all true demand.
(4) Mass mix shift towards the mid-end: High-end premium mass (30% of mass GGR) sees a weaker outlook amid constraints to capital accessibility and lower visit frequency. It is also tougher to grow new players amid tight regulatory controls and VIP weakness. A mid-to-base mass-led recovery would be gradual and take longer to absorb new casino supply. (5) Rapid management sell down of casino stake: is also a negative sign.
Maintain cautious sector view. We cut GGR 2021/2022 forecasts by 14%/12%. With that, we cut 2021E/2022E earnings by 12%/10%, which are 21%/15% below street.
We see further downside risks on earnings. The sector is already trading slightly above the 2019 level, at 12x 2022E EBITDA (historical average of 12.5x). While we stay long-term positive on Macau, we suggest waiting for a better entry level. We maintain NEUTRAL on Galaxy and Sands China, and UNDERPERFORM on Wynn and MSC. We downgrade MLCO/Melco, MGM China, and SJM to UNDERPERFORM (from Neutral).
相关报告
国际投行报告-全球芯片行业:芯片的冲突-台积电、三星和英特尔(英)
4179
类型:行研
上传时间:2022-06
标签:投行报告、芯片、冲突)
语言:英文
金额:5积分
《病毒大流行及免疫力:探寻新冠后时代我们如何战胜传染病》读书笔记
3821
类型:读书笔记
上传时间:2022-12
标签:新冠、疫苗、免疫力)
语言:中文
金额:9.9元
HSBC-中国房地产和物业管理行业2022年展望-2021.11.9-75页
3613
类型:行研
上传时间:2021-11
标签:投行报告、房地产、物业)
语言:英文
金额:5积分
汇丰-中国汽车芯片
3295
类型:行研
上传时间:2022-07
标签:汽车、芯片、投行报告)
语言:英文
金额:5积分
HSBC-全球投资策略之未来城市:城市化形态的变化-2021.4-54页
2471
类型:策略
上传时间:2021-05
标签:投行报告、未来城市、城市化)
语言:英文
金额:5积分
瑞信-2021年全球财富报告(英)
2423
类型:专题
上传时间:2021-06
标签:全球财富、投行报告)
语言:英文
金额:5积分
瑞信-2022全球投资展望:股票、地区和宏观-2021.11.17-194页
1794
类型:宏观
上传时间:2021-11
标签:投行报告、2022投资展望、宏观经济)
语言:英文
金额:5积分
瑞信-全球财富报告2020-2020.10-56页
1614
类型:专题
上传时间:2020-10
标签:全球财富、投行报告)
语言:英文
金额:5积分
瑞信-全球半导体行业:中国集成电路产业的不均衡崛起-2021.1.20-184页
1591
类型:行研
上传时间:2021-01
标签:半导体、中国集成电路、投行报告)
语言:英文
金额:5积分
国会2万字报告:美国新冠疫情大流行期间的家庭债务(中英对照)
1505
类型:宏观
上传时间:2021-05
标签:新冠、家庭债务、美国经济)
语言:中英
金额:7元
积分充值
30积分
6.00元
90积分
18.00元
150+8积分
30.00元
340+20积分
68.00元
640+50积分
128.00元
990+70积分
198.00元
1640+140积分
328.00元
微信支付
余额支付
积分充值
应付金额:
0 元
请登录,再发表你的看法
登录/注册