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Takeaway: Disappointing Mass continues to be the story in Aug. Our Mass Decelerating theme remains intact and could continue to pressure the stocks.

The GGR decline of 6% wasn’t the only story


August’s GGR decline of 6% is worse than what we anticipated when the month started. Most disappointing, YoY Mass revenue growth decelerated to 14% in August. Our Mass Decelerating thesis for 2H 2014 has played out faster than we expected. We also remain concerned with the potential for continued margin pressure as labor costs continue to escalate and player reinvestment rates rise.  The stock valuations look more attractive but we don’t see any positive catalyst on the near term horizon. We remain cautious on the Macau stocks with the exception of Galaxy.  


Macau Market:

  • As already known, GGR fell 6%
  • What was not known was that Mass YoY growth was very disappointing at only +14%, below July’s increase of +17% and 1H 2014 growth of +36%
  • Our Mass Decelerating theme (first espoused in June) of 2H 2014 is occurring at a faster (slower growth) rate than even we thought. We had only heard in the last 2 weeks that August could be as slow as July for Mass – and now we know it was worse.
  • VIP hold was close to normal for the market and slightly higher than last year
  • Rolling Chip volume declined 19% YoY – the worst performance since early 2009
  • Constant hold in both periods would’ve produced a YoY decline of 9% in GGR



  • Market share increased to 24.7%, 180bps above the 6 month average driven by very high hold
  • Despite a nearly 1% YoY increase in hold percentage, GGR only increased 2%.  LVS has been quite lucky in 2014; YTD, hold has been 3.3%.
  • Disappointing GGR growth was driven by Rolling Chip volume that fell 32% YoY, worst in the market
  • Mass revenue grew 18%, better than the market


  • Market share fell 60bps below the 6 month average due to low VIP hold
  • Wynn’s VIP hold percentage fell about 30bps below normal
  • GGR fell 17% YoY but Mass revenue grew a market leading 43% off of an easy comp
  • Rolling Chip volume grew in line with the market


  • Galaxy’s estimated VIP hold was below normal but higher than last year
  • Despite the low hold, Galaxy’s GGR share of 20.9% was 40bps above the 6 month average
  • YoY GGR growth of 15% led the market, despite Mass growth of only 12%
  • Galaxy remains our favorite stock in the group given its ability to drive VIP revenue growth amid a difficult environment and the likely earlier than expected opening of Phase II on Cotai.  We think Phase II could operate for 6-9 months as the only new property on Cotai


  • While below last year, MPEL’s August VIP hold was a little above normal
  • Yet, GGR fell 15% owing to a 29% decline in Rolling Chip volume
  • Mass grew in line with market


  • MGM held 55bps below its normal %
  • Low hold contributed to a market worst 20% decline in GGR
  • However, Mass revenue growth was strong at +29%
  • Rolling Chip volume declined 22%
  • Market share of 8.8% was the property’s worst performance in 3 years, driven by the low hold
  • Mass share was in line with the 6 month average