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Takeaway: December under the hood: no relief in sight


While December was partially a throw away month, the details behind the headline 30% decline were not uplifting.  Adjusting for the reclassification of some premium mass tables to direct VIP to circumvent the smoking ban, mass revenues still likely declined at least high single digits. VIP hold percentage approximated normal so bad luck could not be blamed. And while the Chinese President’s visit certainly had a negative impact, it wasn’t as clear cut as universally expected. GGR fell by a similar percentage in the 1st and 2nd halves of the month and there wasn’t much of a pick up after he left.


Following the relief rally in the stocks immediately after the President’s visit, we’re back on the negative side of the trade/trend. Our forecast calls for 9 more months of negative growth with February as the nadir.  Unfortunately, forward EBITDA estimates remain stubbornly high, substantial risk remains and no positive catalysts are apparent.

Please see our detailed note:  http://docs.hedgeye.com/HE_Macau_1.5.15.pdf