As we expected, the detail behind what was already a very strong month, was even better. As you know, Macau gross gaming revenues (GGR) grew 21% YoY in November to HK$29.3 billion. What you may not know is that VIP hold percentage was approximately 34bps below the year to date average. We estimate that GGR would have grown 30% YoY with normal hold % in November 2013 and 28% with equal hold % in both periods. This truly was another outstanding month in Macau.
Two company themes we’ve been focused on clearly played out during November and should continue: LVS is crushing it across the board and WYNN’s aggressive Mass push is beginning to pay off. These are our favorite Macau names.
Here are our initial takeaways:
Market
- Mass revenues increased 39%
- VIP revenues climbed 15% despite the low hold percentage
- Estimated VIP hold percentage was only 2.66%, below the normal of 3.00% and last year of 2.88%
- VIP hold percentage was the lowest since March of 2011
- Rolling Chip (junket) volume increased 24%, the highest growth rate in almost 2 years
- Slots were the only disappointment, growing only 2% YoY
LVS
- While 160bps better than October, market share was just in line with its 3 month average
- However, VIP hold percentage was almost 60bps below normal – market share would’ve increased sequentially with normal hold
- GGR outgrew the market (27% vs 21%) but assuming normal hold, LVS’s GGR would’ve grown 40% (vs the market at 30%)
WYNN
- WYNN’s market share grew 30bps over its 3 month trailing average
- Hold percentage was 10bps below normal but significantly below last November’s high hold
- Wynn Macau grew its Mass share 130bps above its trailing average
- Most importantly, Mass revenue grew over 53% YoY, the highest growth rate since June of 2011, and led the market
- This was a great month for Wynn Macau
MPEL
- MPEL was one of the few operators to hold above normal
- VIP volume and Mass share both fell below recent trend
- Total revenue growth was in-line with the market despite the relatively high hold
- We think MPEL could be a share loser over the next year
MGM
- MGM held well above normal and higher than last November’s low hold
- High hold contributed to 39% YoY GGR growth, 2nd highest in the market
- Mass market share was only 6.4%, the 3rd lowest of its history
- We think MGM has the most to lose by WYNN’s recent Mass push and that indeed played out in November
Galaxy
- Galaxy led the market in GGR growth for the 2nd straight month
- Hold was well below normal
- Mass and Rolling Chip volume share was above recent trend
- Solid month from Galaxy
