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As you already now, May gross gaming revenues (GGR) increased only 9% YoY.  Hold was not a factor but lower than expected VIP volumes were the main culprit to the soft month.  We believe the timing shift of the Dragon Boat Festival and May’s rainy weather played a role but not enough to explain the shortfall.  June looks like another high single digit growth month to us – probably not a catalyst for share appreciation.

The bad news is that VIP revenues grew only 2%.  May VIP hold percentage of 2.93% (adjusted for direct play), compared with 2.90% last May.  The good news is that Mass performed exceptionally well, up 36% YoY and 6% MoM.  Galaxy was the big winner, massively outperforming the market on VIP (despite near normal hold) and a stable mass business.  On the other hand, MGM massively underperformed across their VIP, Mass and Slots businesses.

Here are some takeaways:

Market

  • Mass revenues grew 36%, slightly below the average growth for the last 12 months.
  • VIP Rolling Chip (RC) volume and VIP revenues both decreased 2%
  • RC volume grew at the slowest rate since October 2012 when RC volume contracted 5
  • Slot revenue increased 6%, up from +4% in April but below the 9% average for the last 12 months.
  • Assuming consistent hold in both periods, GGR would’ve grown 9% YoY

MACAU: VIP VOLUMES TO BLAME FOR MAY'S SOFTNESS - m1

LVS

  • GGR grew 21% YoY, up from 13% in April but slower than the 32% growth for the last 12 months.
  • VIP revenues increased 4% and RC dropped 13% YoY as compared to VIP revenue growth of 18% and RC growth of 15% for the last 12 months.
  • The LVS properties held just above normal on VIP
  • Mass grew 45%, the highest of any gaming operator during May
  • Market share was above trend in Mass and Rolling Chip volume

WYNN

  • GGR dropped by 4%, significantly slower than the 14% growth for the last 12 months.
  • VIP revenues decreased 16% and RC dropped 17% YoY as compared to VIP revenue growth of 11% and RC volume growth of 16% for the last 12 months.
  • The RC contraction of 17% has not occurred since the 22% contraction in March 2013 and the 18% drop in July 2012.
  • WYNN held high on VIP
  • Mass growth was 36%
  • Slot revenue grew 29%, the market leader in May

MGM

  • YoY GGR growth dropped a shocking 11%, a rate not seen since the 18% contraction in October 2012
  • VIP revenues decreased 22% also the lowest since October 2012
  • RC declined 15%.  MGM’s RC business could be under more pressure if Wynn Macau decides to get more aggressive on commissions advancement to junkets
  • MGM held low in VIP
  • Mass growth was 31%
  • Slot revenue dropped 11%, the worst performance among the operators.
  • The weak VIP business pushed market share below recent trend

MPEL

  • GGR dropped 1% YoY and follows April’s 4% decline, a two consecutive month contraction not seen since July and August 2012.
  • VIP revenues contracted 17%, due to weakness at Altira
  • Held low on VIP
  • RC volume contracted 23% following April’s down 21% – we’ve been hearing decreased play from “casual” junkets
  • Mass grew 35%, just below the market

Galaxy

  • GGR increased 24% YoY
  • VIP revenues increased 25%, based on market leading results from Galaxy Macau
  • Rolling chip volume increased a massive 30%, again driven by Galaxy Macau
  • VIP hold was almost normal
  • Mass grew 28% - as compared to 37% for the last 12 months.
  • Slot revenues dropped 8%