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Takeaway: Macau momentum continues and we'll stick with LVS, the market share gainer

+21% growth bested pre and end of the month Street projections but September was even better than the headline

September was a darn fine month for the Macau operators.  We knew that.  What we didn't know was that Mass would be up 36% YoY and Rolling Chip Volume would also be up double digits.  VIP hold percentage was actually a little below normal and last year.  We will try, but it’s hard to poke many holes in this fabulous month.  Even slots were up 13%.  For October, we’re thinking that the high end of our GGR forecast of 20-25% might be the right number.  As a market share gainer, LVS remains our favorite Macau play.

HIGHLIGHTS:

General / Market

  • Compared to our detailed top down forecast, VIP volumes came in a lot better, mass volumes were a little better while slots were a little weaker.
  • Raw hold for TTM declined for the first time in a while to 3.19% from 3.21%. Trailing 24M remained at 3.18% while historical stayed at 3.12%
  • Even slots participated, posting the 3rd highest monthly YoY growth of the year
  • LVS properties exhibited the best market growth in VIP and slots. MPEL had the best growth in Mass, and SJM & MGM bested LVS for VIP RC growth

LVS

  • VIP hold % was slightly below normal but well above last year - 2.80% vs. 2.26%
  • The LVS properties grew faster than the market in all facets of the business:  Mass, Junket volume, VIP volume, and slots
  • GGR share dipped from July and August but that was hold related; junket volume share was the 2ndhighest ever for the company
  • Mass share was the lowest in 6 months
  • Junket volume share was the 2nd highest since Jan 2010. 

WYNN

  • Lowest growth of 6 concessionaires
    • Worst Mass growth
    • Worst RC volume growth
  • Held well above normal on Rolling Chip but only a little higher than last September’s hold
  • Rolling Chip share was one of the lowest ever at 11.3%, down 110bps sequentially - 70bps below the all-time low of 10.6% in September 2007, and 70bps and 50bps below their 6M average and TTM average share, respectively
  • Mass share increased 110bps sequentially but was in-line with the 6 month and TTM average

MPEL

  • Held high but had a difficult YoY comp
  • Best Mass growth of the 6 concessionaires, offset by the worst VIP growth driven by YoY declines in RC volume at Altira
  • Mass revenue share was noticeably below recent trend - 60bps below the 6M and 20bps below TTM trailing average. Although in MPEL’s defense, this kind of dip (1.3%) isn’t unusual.  Interestingly we have seen dips in MPEL’s mass share with rebounds in October since 2008
    • 1.0% decline April with a 1.5% bounce back in May
    • 2.2% decline in Jan with a 2.6% jump in Feb
    • 1.8% decline in Sept 2012 with a 1.1% increase in October 2012
  • While up sequentially, junket volume share continues to trend lower compared to the 6 and 12 month trailing average
  • We are becoming increasingly concerned with share losses in mass and Junket volume
  • MPEL gained the most slot market share this month and has remained the distant 2nd in terms of market share behind LVS in this category for 4 consecutive months and for 11 of the last 14 months

MGM

  • Held well below normal on junkets play and YoY comparisons were exasperated by high hold comparisons last September
  • MGM’s junket volumes took the top prize for growth in September and at 49% marketed the properties’ best growth rate in 2 years.
  • At 12%, Junket RC also set a record for all-time high market share
  • Mass growth at 22% decelerated from the prior 6M and 12M TTM rates of 33% and 31, respectively

Galaxy

  • Hold was normal but ahead of last year’s September
  • Galaxy was the largest MoM market share gainer, but market share was in-line with their trailing 6M and 12M average
  • YoY GGR grew 24% YoY, the 2nd highest in the market
  • Galaxy’s slot growth went negative for the first time in 32 months

YOY TABLE OBSERVATIONS

Total table revenue grew 21% YoY.  Mass market maintained its high growth at 36%.  VIP volume rose 19% while VIP revenue gained 16%.

LVS

LVS led the market in table win at +51%.  Mass revs soared 51% while VIP RC grew 23%.  Including direct play, we estimate that LVS held at 2.8% in September, higher than last September's 2.3%, assuming direct play of 17% vs. 22% last year.  

  • Sands fell 16%, similar performance to August 2013
    • Mass grew 16%
    • VIP revenue fell 34%, while RC fell 37%
    • Sands held at 3.3% vs 3.3% in the same period last year.  We assume 10% direct play in September 2013  vs 8% in September 2013.
  • Venetian grew 42% 
    • Mass increased 29%
    • VIP revenue grew 57%, reversing two months of declines
    • Junket VIP RC gained 40%
    • Assuming 28% direct play, hold was 3.1% compared to 2.6% in September 2012, assuming 30% direct play 
  • Four Seasons gained 68%, best performance since September 2012
    • Mass revenue soared almost 146% on a comp of -27%
    • VIP revenue grew 52% and junket RC rose 14%. September hold (assuming 15% direct play) was 2.5% vs 1.85% in September 2012 when direct play was 16%.
  • Sands Cotai Central rocketed 157% higher for the 2nd consecutive month
    • Mass jumped 126% 
    • VIP revenues grew 184% 
    • Junket RC gained 61%
    • If we assume that direct play was 10%, hold would have been 2.6% vs 1.4% in September 2012 when direct play was 9%. 

MPEL

MPEL gained 18% in table revenues.  Mass growth continued to excel at 71% while VIP growth was 4%. We estimate that MPEL held at 3.1% vs 3.2% last September.  Estimated direct play was 11%, in-line with last year, but up sequentially.

  • Altira table revenues fell 8%, 1st decline since Feb 2013
    • VIP revs dropped 11%
    • VIP RC fell 6%
    • Mass gained 25%
    • We estimate that hold was 3.3%, compared to 3.3% in the prior year
  • CoD table revenues grew 30% YoY
    • Mass increased 77%, continuing its impressive streak of strong YoY double-digit gains since the property opened
    • VIP win grew 12%, while RC grew 15%
    • Assuming a 16% direct play level, hold was 3.0% in September compared to 3.1% last year (assuming 15% direct play)

WYNN

Wynn table revenues grew 8%

  • VIP revenues and RC both grew 7%
  • Wynn held at 3.4% (assuming direct play of 8%) vs 3.3% last September (assuming direct play of 10%)
  • Mass revenues gained 15%

MGM

MGM table revenues grew 19%

  • We estimate that hold was 2.6% adjusted for direct play of 7% vs hold of 3.1% last year assuming 8% direct play
  • VIP RC and Mass grew 49% and 22%, respectively

GALAXY

Galaxy table revenues grew 24%.  VIP revenues gained 19% while RC volumes grew 10%.  On the bright side, Mass growth was strong at 42%.  Hold was 3.1% in September 2013 vs. 3.1% last year.

  • Starworld table revenues gained 16%
    • Mass soared 70%
    • VIP gained 8%.  
    • Junket RC rose 17%
    • Hold was 2.7% vs 3.0% last year
  • Galaxy Macau's table revenues jumped 27%
    • Mass had another great month at 44% growth
    • VIP gained 21%
    • Hold was 3.5% vs 3.2% last September

SJM

Total table revenue grew 11%, with mass and VIP growth of 20% and 6%, respectively.  RC volume gained 25%.  SJM held at 2.6% vs 3.1% last year.

SEQUENTIAL MARKET SHARE - September relative to August (property specific details are for table share while company-wide statistics are calculated on total GGR, including slots):

LVS

Market share slipped 70bps to 22.0%.  September’s share is above its 6-month average of 21.8% and better than its 2012 average share of 19.0%. 

  • Sands' share gained 60bps to 3.2%.  For comparison purposes, 2012 share was 3.9% and 6M average share was 3.1%.
    • Mass share gained 50bps to 5.0%
    • VIP rev share gained 70bps to 2.3%
    • RC share lost 10bps to 1.9%
  • Venetian’s share was unchanged at 8.6%.  2012 share was 7.9% and 6 month trailing share was 8.4%.
    • Mass share decreased 150bps to 13.0%
    • VIP share increased 110bps to 6.6%
    • Junket RC share gained 50bps to 4.7%
  • FS gained lost 70bps to 3.1%.  This compares to 2012 share of 3.7% and 6M trailing average share of 3.4%
    • VIP fell 110bps to 3.4%
    • Mass share was unchanged at 2.4%
    • Junket RC was unchanged at 3.5%
  • Sands Cotai Central's table market share fell 60bps to 6.7%, which compares to the 6M trailing average share of 6.6%.
    • Mass share fell 60bps to 8.6%
    • VIP share fell 70bps to 5.7%
    • Junket RC share gained 30bps to 6.3%, its highest share ever

MPEL

MPEL lost 60bps in share in September to 13.8%.  Its 6 month trailing share is 14.4% and their 2012 share was 13.5%.  

  • Altira’s share gained 10bps to 3.4%, below its 6 month trailing share of 3.6% and 2012 share of 3.9%
    • Mass share rose 10bps to 1.2%
    • VIP was unchanged at 4.4%
    • VIP RC share fell 60bps to 4.1%
  • CoD’s share lost 80bps to 10.3%, above the property’s 2012 and 6M trailing share of 9.4% and 10.7%, respectively.
    • Mass market share lost 130bps to 11.6%
    • VIP share lost 50bps to 9.6%
    • RC share gained 110bps to 8.4%

WYNN

Wynn GGR share was 11.4%, down 20bps MoM.  2012 average share was 11.9% and their 6M trailing average share has been 10.8%.

  • Mass share jumped 110bps to 7.4%
  • VIP share lost 90bps to 13.4%
  • Junket RC share dropped 110bps to 11.3%

MGM 

MGM’s market share lost 70bps to 9.6%, above its 6M and 2012 average of 10%

  • Mass share was flat at 6.9%
  • VIP share fell 120bps to 10.6%
  • Junket RC gained 40bps to 12.0%

GALAXY

Galaxy's share gained 130bps to 18.4%, below its 2012 average and 6-month average share of 19.0% and 18.5%, respectively

  • Galaxy Macau share was unchanged at 10.7%
    • Mass share fell 60bps to 9.7%
    • VIP share rose 30bps to 11.2%
    • RC share lost 40bps to 9.9%
  • Starworld share gained 120bps to 6.7%
    • Mass share gained 70bps to 3.9%
    • VIP share gained 140bps to 8.1%
    • RC share slipped 10bps to 9.2%

SJM

SJM share gained 80bps to 24.7%, below their 2012 average of 26.7% but back above their 6M trailing average of 24.4%

  • Mass market shares jumped 170bps to 28.2%, the biggest gainer in the market
  • VIP share gained 50bps to 23.9%
  • Junket RC share rose 10bps to 28.3%

Slot Revenue

Slot revenue grew 13% YoY to US$136MM in September

  • LVS had the best YoY growth at 42% to $47MM
  • MPEL gained 13% to $26MM
  • MGM gained 7% to $20mm
  • WYNN lost 3% to $15MM
  • GALAXY lost 6% to $15MM  
  • SJM had the worst YoY slot performance for the 3rd consecutive month, -8% to $13MM