STUNNING VOLUMES IN MACAU

Macau’s record setting February was volume driven and Mass was off the charts.  MPEL looks like the standout.

February was a record month, despite only 28 days.  Total gaming revenues increased over 47% off of a 71% comp.  Importantly, the growth in February was achieved in spite of low market hold and difficult hold comparisons.  Assuming direct play of 7% or RC of $4.8BN, February hold was only 2.67% compared to a hold of 3.02% in February 2010 (assuming 7.1% direct play or $2.8BN).  If hold in both periods was 2.85%, February YoY GGR growth would have been up 61%.

Market margins should be strong as Mass and slot revenue each set a monthly record as well.  In fact, high margin slot and Mass revenue growth in February as a percent of total revenue growth was the 2nd highest of any month since August of 2009.  Despite the low hold, February may have been the most profitable month ever in Macau.

Every property that we track appeared to have below normal hold, with the exception of Venetian.  MGM experienced its second best market share since opening this month.  MPEL also had a standout month in February.  Not only did market share grow 50 and 70bps from Dec and Jan, respectively, Mass market share for MPEL was at its highest ever at 11.9%, a 200bp increase from January.  City of Dream’s table share also reached 10.0%, just 10bps short of Venetian’s share – which is a huge accomplishment for the company.  On a YoY basis, MPEL’s total gaming revenue increased almost 62% and Mass table revenue climbed a whopping 63% versus market Mass growth of “only” 36%. 

Y-o-Y Table Revenue Observations:

Total table revenues grew 47% YoY this month despite low hold in the month, with Mass growth of 36% and VIP growth of 51%. Junket RC grew 71% in February.

LVS table revenues grew 32%

  • Sands was up 12%, driven by a 11% increase in VIP and a 14% increase in Mass
    • Hold was a drag for Sands this month.  Junket RC chip grew 51%.  Hold, adjusted for 15% direct play (in-line with 4Q10), was about 2.69%, compared to 3.75% hold in Feb 2010, assuming a 10% direct play estimate (in-line with 4Q09)
  • Venetian was up 37%, driven by a 24% increase in Mass and 46% increase in VIP.
    • Junket VIP RC increased 35%. Assuming 19% direct play, in-line with 4Q10, we estimate that hold was 3.27%, compared to 2.92% hold in Feb 2010 (assuming 21% direct play)
    • Venetian was the only property we track that held over 3% in February.
  • Four Seasons was up 75% y-o-y driven by 71% VIP growth and 93% Mass growth
    • Junket VIP RC increased 66%. Assuming 50% direct play, hold was 2.45% compared to an estimated hold of 2.60% in Feb 2010 assuming direct play levels were in-line with 4Q09 at 43%.

Wynn table revenues were up 50%

  • Mass was up 73% and VIP increased 46%
  • Junket RC increased 70%
  • Assuming 12% of total VIP play was direct, we estimate that hold was 2.58% compared to 3.11% last year (assuming 10% direct play)

MPEL table revenues grew 64%, equally driven by Mass growing 63% and VIP growing 64%

  • Altira was up 23%, with Mass continuing its tear, up 96% and VIP up 20%
    • VIP RC was up 56% - the property’s best growth quarter since Nov 2008.
    • Hold comparisons were not favorable. We estimate that hold was 2.57% compared to 3.34% last year.
  • CoD table revenue was up 97%, driven by 59% growth in Mass and 114% growth in VIP
    • Junket VIP RC grew 120%; Feb 2010 hold was 2.76% (assuming 15.2% direct play) vs. 2.58% this month, assuming 18.5% direct play

SJM revs grew 44%

  • Mass was up 26% and VIP was up 53%
  • Junket RC was up 69%

Galaxy table revenue was up 25%, driven by 56% growth in Mass and VIP growth of 21%

  • Starworld table revenues grew 30%, driven by 61% growth in Mass and 28% growth in VIP
  • Junket RC grew 41% at Galaxy and 48% at Starworld
  • Our understanding is that Starworld is somewhat capacity constrained

MGM table revenue was up the most in February, growing 92%

  • Mass revenue growth was 49%, while VIP grew 103%
  • Junket rolling chip jumped a massive 158%
  • Assuming direct play levels of 15%, we estimate that hold was only 2.63% this month compared to 3.34% last year. 

Sequential Market Share (property specific details are for table share while company wide statistics are calculated on total GGR, including slots):

LVS share ticked up to 18.1% from 17.8% in January, but was still below its 2010 average of 19.5%

  • Sands' share decreased 80bps to 5.2%
  • Venetian’s share rebounded from all time lows in January to 10.1% helped by high hold
    • Mass share increased 20bps to 14.8% from 14.7% in January
    • VIP share increased 2.9% to 8.7%
    • Junket RC increased 30bps to 5.7%
  • FS share decreased to 2.3%, down 1.1% from January which benefited from massive hold
    • Junket RC share increased 30bps to 1.4%
    • VIP share decreased to 2.4% from 3.8% in January
    • Mass share declined 30bps to 1.7%          

WYNN's share increased 1% to 15.2%

  • Mass market share declined 70bps to 11.2%, compared to an average of 10.1% in 2010
  • VIP market share increased 1.4% to 15.9% sequentially, in-line with its 2010 average of 16%
  • Junket RC share increased 1.7% to 15.6% compared to Wynn’s 2010 average of 15.2%

MPEL's market share increased to 15.2% from 14.7% in January – tied for 3rd place with Wynn

  • Altira’s share decreased to 5.1%, decreasing 1.6% sequentially- losing most of its gains in January. The share loss was entirely on the VIP side which lost 2.1% share sequentially.
  • CoD’s share increased 2.2% sequentially to 10% - only 10bps below Venetian’s table market share!
    • Mass market share increased to 10.3% - an all-time high for the property
    • VIP market share increased 2.1% to 9.9% while Junket RC share increased 1.1% sequentially to 8.9% (compared with 5.7% share for Venetian)

SJM's share decreased 80bps to 30.6% from January levels, with share losses in both Mass and VIP

Galaxy was the biggest share loser in the month with sequential declines of 2.3% to 9.1% - the company’s worst share month since May 2008

  • Starworld's market share plunged 2.9% to just 7.2% from 10.1% in the previous month
  • Share losses were entirely VIP driven

 MGM's share increased to 11.8%, from 10.6% in January and represented the property’s best share month since opening

  • Mass share decreased 50bps to 8.5%
  • VIP share increased 2.0%
  • Junket RC share increased 1.3% to 11.8% - a record share for the property

Slot Revenue:

Slot revenue grew 49% YoY in February to $120MM, setting an all-time monthly high – the second best month was October 2010 at $111MM

  • MGM slot revenues grew the most at 118% reaching $17MM – in-line with January’s record for the property
  • At 108% YoY, Galaxy had the second best growth – granted, on a very small base. Feb slot revenue reached $5MM.
  • Wynn’s slot revenue grew 81% YoY reaching $28MM –setting a record for the property and blowing away prior highs set in October at $22MM
  • MPEL’s slot revenues grew 30% reaching $22MM – also setting an all-time high for the company
  • SJM grew 30% to $16MM
  • LVS had the slowest slot growth at 25%, granted off of the highest base. Slot revenues were $32MM.

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