HIGH HOLD A BIG CONTRIBUTOR BUT DECEMBER STRONG ON ALL LEVELS

Takeaway: December was never the issue for us but hurdles remain for Q1

December was never the issue for us but hurdles remain for Q1

As we suspected, high VIP hold contributed significantly to December’s strength.  Rather than the 20% actual YoY growth, we estimate that if hold was normal, GGR would’ve gained a still strong 13-14%, slightly above our original 12% projection.  We have to estimate Direct VIP play so hold % is also an estimate.  Mass growth was once again impressive – up 32% and in-line with the recent trend.

Every operator held above normal on their VIP business.  We also suspect that Mass hold % was above normal for the market and particularly for MGM.  With the exception of Wynn, each operator also generated significant YoY growth in GGR.  Wynn’s VIP rolling chip and VIP revenue both fell YoY although the property eked out a 4% gain in Mass.  Not surprisingly, Sands China’s properties generated the best YoY growth at 52% but MGM’s 34% growth was surprising although certainly hold-aided.

Here are some observations before we put out our more detailed note:

Direct play adjusted hold was 3.18%

  • The highest since we have been tracking direct play #s (May 2010). 
  • If hold was 2.85%, then growth would have been 13-14% vs. 20%

Actual numbers came in better than projected

  • Mass:  +3% better
  • Slots:  +10% better
  • RC volume:  +3% better- actually improved almost 5% YoY – best growth since Feb 2011

Company Observations

  • Sands China
    • Gained 20bps of share.  We estimate that they held at 3.14% - high but in-line with the market this month
    • Unlike last month, the driver behind share gains was VIP RC share.  Mass share declined MoM.
    • For the 6th month in a row, Sands YoY GGR growth led the market at 52% led the market.  Mass grew 48%, which is impressive, but only earned LVS 4th place behind MGM, MPEL, and Galaxy this month.
    • VIP growth was the strongest among all 6 concessionaires for the consecutive month at 55%, and VIP RC growth also led the market for the 7th consecutive month at 46%
  • Wynn Macau
    • Wynn continued to struggle this month with GGR 10%- the worst performance of the 6 concessionaires
    • Estimated hold was 3.1%, below the market but above normal
    • Wynn was the biggest loser in term of market share this month losing 1.8% to just 10.3%
    • The loss in market was driven by losses in the VIP RC share which fell to just 10.8% - the lowest point since November 2007
  • MPEL
    • MPEL had a pretty good month, considering that they were the only concessionaire that held below 3% this month. 
    • GGR growth was 13% and market share only dipped 20bps to 13.5%.
    • Impressively, MPEL’s Mass revenues grew 56% YoY - just behind Galaxy for the top spot
  • MGM
    • A very strong month, party driven by high hold of 3.55%
    • GGR growth was 35% which earned them 2nd place behind LVS
    • Mass revenues grew an impressive 51%, coming in 3rd place behind Galaxy and MPEL.
    • VIP chips grew 10% YoY, ahead of the 9% market growth
    • Market share bounced back to 10.9%, above the company's 6-month and 2011 average
  • Galaxy
    • Galaxy’s share increased to 18.2%, up 2% MoM, the largest market share gainer in December
    • Galaxy held high in December, at an estimated 3.39% across their two properties
    • However, December marked the 5th month in a row where their VIP RC growth was negative. Galaxy was only one of two concessionaires that experienced YoY declines in VIP RC growth in December.
    • Galaxy took the top spot for Mass growth at 59%, with strong growth across both of their owned properties
  • SJM
    • Held their ground with GGR growth of 18% and normal hold of 3.03%
    • Mass growth was 9% YoY and VIP RC growth was 12%

HIGH HOLD A BIG CONTRIBUTOR BUT DECEMBER STRONG ON ALL LEVELS - table1

HIGH HOLD A BIG CONTRIBUTOR BUT DECEMBER STRONG ON ALL LEVELS - mass1

HIGH HOLD A BIG CONTRIBUTOR BUT DECEMBER STRONG ON ALL LEVELS - rc1