Morgan Stanley’s disheartening Macau prediction


For the second time this year, global brokerage and investment firm Morgan Stanley reportedly questioned the short-term profitability of the Macau the casino industry due to the lingering impacts of the coronavirus pandemic.

According to a report from Inside Asian Gaming, the New York-based financial services giant lowered its combined profit forecast before interest, taxes, depreciation and amortization by 69% for the 41 casinos in Macau this year, from 2.8 billion dollars to 867 million dollars. Source clarified that the move comes only about four months after the same organization lowered its forecast of aggregate gross gaming revenue for 2021 for the former Portuguese enclave by around 19% to around $ 16.3 billion.

Check to come:

Morgan stanley reportedly further reduced its associated estimate for next year’s combined Macau casino profit before interest, taxes, depreciation and amortization from 29% to $ 6.4 billion on revenue he now expects to be 27% lower than previously envisioned at something closer $ 12.5 billion. To make matters worse and the company further reduced its associated aggregate income forecast by 23% for 2023 for $ 9 billion and expects accompanying receipts to be approximately 14% lower than approximately $ 31.5 billion.

Visitor vacuum cleaner:

Morgan Stanley analysts Gareth Leung, Thomas allen and Praveen Choudary allegedly used an official dossier to explain that the planned cuts come as casinos in Macau continue to experience reduced levels of visits due to a series of travel restrictions linked to the coronavirus. The trio have allegedly proclaimed that these checks are unlikely to be removed anytime soon to maintain combined visit levels at about 25% of their intensity before the pandemic, which would lead to a decrease in gross revenue from aggregated games.

Would have read the file of Leung, Allen and Choudary …

“We are confident of pent-up demand, which should ultimately lead to higher future mass incomes than in 2019 based on China’s retail sales and Vegas gaming revenue. But, with a zero tolerance policy, lower efficacy for some vaccines and the “delta variant”, recovery can take months or years. “

License outlook:

Inside Asian Gaming reported that the three Morgan Stanley analysts have further commented on the upcoming Macau casino license re-bidding process and forecast the full year could be completed ASAP in order to eliminate the prospects of ‘overhang.’ The trio allegedly predicted that the local government seems likely to maintain the ‘status quo in terms of number of licenses and tax rate ‘ both of which are positive developments in the face of earlier investor concerns.

Leung, Allen and Choudary’s file would have read …

“We are more concerned about the reopening because Macau games will thrive and casino licenses will be awarded and / or renewed but the timing of the full opening of the borders between Hong Kong, Macao and China is still unknown. “


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