BREAKING DOWN THE STRONG DEC IN MACAU

VIP hold was high but December was still a very strong month.  Here are the property details.

 

 

As we’ve discussed, total gross gaming revenues rose 67% and slightly eclipsed October’s record setting month.  We estimate approximately 13-15% of the YoY growth was related to higher VIP hold.  Nevertheless, it was a very strong month.  Importantly, high margin Mass gaming revenue climbed 34% off of a difficult 33% comparison.  Mass growth continues to approximate the visitation plus China GDP equation.  VIP Chips (junket volume) increased 59% while VIP revenue (junket and direct VIP) climbed 82%.  Slot revenue increased 29%.

 

Direct play appears to have remained at 7.9% of VIP volume, similar to last year. Adjusted for direct play, market VIP hold appears to be about 3.1%, higher than last year's 2.7%.

 

In terms of market share, it was a great month for Wynn and MGM with both earning well above trend.  LVS suffered its second consecutive weak share month and it wasn’t hold related.  While LVS got back to trend in Mass share, VIP volume only grew 2% on a YoY basis, well below the market at 59%.  We think LVS will continue to lose share in 2011.

 

We are still going through the models but it looks like WYNN is tracking well ahead of consensus based on its Macau performance.  Preliminarily, we think total WYNN EBITDA could exceed the Street by 20-25% in Q4.  For LVS, there doesn’t appear to be upside to Q4 and we remain a little below the Street for company EBITDA.  Macau remains a small piece of MGM’s overall business but EBITDA there is tracking ahead of consensus which we think is sustainable and should help the IPO close this quarter.  Finally, MPEL looks like it should have no problem handily besting the consensus $106MM estimate.

 

 

YoY Table Revenue Observations

 

LVS table revenues rose 31% YoY as VIP revenues grew 32%, reversing the decline in November, and Mass revs increased 28%.  VIP RC only rose 2% because of underperformance at Four Seasons.

  • After two months of declines, Sands led the way for LVS, increasing 43.8% in table revenues.  Much higher hold relative to last December benefited Sands.  
    • VIP revenues increased 63%, with RC volume up 10%
    • Mass revenues increased 14%
    • Assuming 14% direct VIP play (same as 2Q & 3Q2010), we estimate that hold for December 2010 was 3.7% which compares to 2.5% hold last December, assuming 9% direct play (in-line with 4Q09).
  • Venetian was up 28%
    • VIP revenues rose 25%, with RC volume up 27%
    • Mass revenues increased 32%
    • Assuming 23% direct VIP play volume, we estimate that hold for December was 3.0% compared to 3.1% last December if we assume that direct play was 17% (in-line with 4Q09 levels).
  • Four Seasons eked out a 2% gain
    • Mass revenues soared 74%, highest growth of the year
    • VIP revenues dropped 18% as VIP RC volume tumbled 56%
    • Assuming 41% direct VIP play in December, implied hold is 1.9% compared to 1.3% in December 2009 assuming direct play was 28% (consistent with 4Q09)

Wynn Macau/Encore table revenues were up 72%, driven by an 80% increase in VIP revenues and a 39% increase in Mass revenues

  • Junket RC volume increased 40%. Assuming 12% direct VIP play, December hold was 3.9% compared to 3.0% hold experienced in December 2009 (assuming 12% direct play)

MPEL table revenues soared 120% with the growth driven by a 127% increase in VIP and Mass growth of 90%

  • Altira was up 80%, due to a 77% increase in VIP revenues and a 119% increase in Mass revenues
    • VIP RC rose a healthy 48%
    • We estimate that hold in December was 2.5% vs. 2.0% in December 2009
  • CoD table revenue increased 148% YoY, driven by 85% growth in Mass and 174% growth in VIP revenues
    • Junket VIP RC increased 85%
    • Again, hold benefited CoD.  Assuming 15% direct VIP play, hold was 3.4% compared to last December's hold of 2.3% assuming 18% direct play

SJM table revenues grew 62%

  • Mass was up 24% and VIP was up 85%
  • Junket RC volumes soared 89%
  • SJM's hold was roughly normal at 2.8%, similar to last year's.  

Galaxy table revenue grew 30%, despite tough hold comparisons, driven by a 31% increase in VIP win and a 25% increase in Mass. RC Volume increased 56.1%.

  • Starworld's table revenue increased 47%, driven by 50% growth in VIP revenues and 16% growth in Mass
  • Starworld RC volumes increased 70%.  Despite hold being close to normal, the comparisons from December 2009 were difficult.  December hold for the Group and Starworld was 2.8% and 3.1%, respectively, compared to last December's hold of 3.3% and 3.5% last year. 

MGM led the market with an astounding 209% table rev growth but December's hold almost doubled that of last year.

  • Mass revenue growth was 61%, while VIP revenues ballooned 267%
  • VIP RC grew 99%
  • Hold was high, at an estimated 3.4%, and was much higher than last December at 1.8%

 

Table Market Share

 

LVS table share rebounded 1.5% sequentially to 16.3%, still way below its trailing 12-mth average of 19.3%

  • LVS's share of VIP revenues rose to 13.3% from a historical low of 11.9%
  • VIP RC share dropped again to a new low of 10.9%, from 11.6%
  • Mass share gained 2% to 26.5%, in-line with its trailing 12-mth average
  • Sands market share increased by 110bps due to a 150bps gain in VIP share
  • Venetian gained 40bps to 9.1% sequentially, driven by a 150bps gain in Mass share
  • FS share remained unchanged at 1.2%

WYNN's table share was roughly unchanged sequentially at 16.9%, but way above recent trends

  • Mass market increased 60bps to 11.5%, its highest share this year
  • VIP revenue share decreased 30bps to 18.5% sequentially
  • VIP RC share dropped 2.5% to 14.1%

MPEL's table share decreased 50bps sequentially to 14.2%, driven by a 60bps increase in Mass and an 80bps decrease in VIP share. RC volume share increased 1.4% to 15.7%.

  • CoD's share increased 80bps
  • Altira's share decreased 1.2%, driven by a 1.5% decrease in VIP share

SJM's table share decreased by 1.5% to 30.6%, driven by a 120bps loss in Mass share and 150bps decrease in VIP share.  RC volume share increased 1% to 34%.

Galaxy kept its table share of 10.3%.

  • Starworld's market share increased 60bps sequentially to 9.1%
  • Group Junket RC share increased 40bps to 14.4%

MGM's table share continued its climb to 11.6%, the property's highest share since July 2009

  • MGM's share gain can be attributed to a 110bps increase in VIP revs
  • Mass share lost 1.7% from November to 7.4%
  • RC share increased 30bps to 10.6%

 

December Slot Revenue Observations

 

Slot revenue grew 29% YoY in December reaching a total of $99MM and accounting for 4% of total revenues

  • LVS slot revs actually decreased 3.2%
  • MPEL, Galaxy, and MGM had +70% slot rev growth
  • SJM slot revs rose 50%
  • WYNN slot revs increased 12%

BREAKING DOWN THE STRONG DEC IN MACAU - table share

 

BREAKING DOWN THE STRONG DEC IN MACAU - mass share

 

BREAKING DOWN THE STRONG DEC IN MACAU - rc turnover


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