Earlier today, Hong Kong-based stock broker UBS Securities Asia Ltd. released a note concerning the likely performance of Macau’s gambling operators on the market in 2015. According to the company, Galaxy Entertainment Group Ltd. will probably generate the most substantial gaming revenue by the end of the year.
UBS forecasts that the operator’s market share might grow by 2% to reach 22.7%. By comparison, Galaxy Entertainment held a 20.7% market share in 2014. The likely rise is due to the launch of Galaxy Macau Phase 2, which is scheduled for May-June 2015, and a potential increase in profits from VIP players.
Reportedly, the new gaming floor will feature between 150 and 200 new gaming tables. Of those, 50-70 will be intended for VIP players and 100-130 will be for mass players.
According to analysts Anthony Wong and Angus Chan, Galaxy Entertainment’s collaboration with major junket operators might lead to an increase in VIP revenues. They presume that the gambling operator’s VIP market share might grow to 27%. An almost 2% rise is expected in mass market share, too. Last year, Galaxy Entertainment held a 14.9% one. Analysts predict that it might grow to 16.7% by the end of 2015.
If UBS’ prognosis proves right, SJM Holdings Ltd. will probably have its first year as not being the operator that holds the largest market share.
As UBS stated in its note, the above-mentioned gaming provider might face a 1.9% decrease in market share. Last year, the company held a 23.4% one. UBS’ analysts expect that it might drop to 21.5% in 2015. What is more, VIP share is also likely to decrease to 22.1%. SJM Holdings, however, will most probably manage to retain its mass market share.
UBS also estimated that this year, Sands China’s share might drop by 0.4% to 22.4%.
Melco Crown Entertainment Ltd. is expected to perform better in 2015. The company’s management team was reshuffled and certain changes concerning its partnership with junket operators occurred. These modifications already proved to be successful, as Melco Crown experienced a 6% growth in VIP volumes in the fourth quarter of 2014 as compared to the third one. Analysts claim that the company might score a 0.4% growth in VIP share to 12.8%.
As for Melco Crown’s mass market share, it will probably be maintained around 14.5%. This can be attributed to the launch of Studio City in the second half of 2015.
MGM China Holdings Ltd. is expected to face a major loss in share in 2015. Wynn Macau Ltd., on the other hand, is to retain both its VIP and mass market shares. The company is expected to introduce its upgraded VIP area which will feature two new rooms with 36 tables. This is what might help Wynn maintain its 11.8% share on VIP market in 2015.
Generally speaking, UBS’ analysts expect that Macau’s revenue from gaming activities might decrease 20% in the first six months of 2015 and it is likely to rebound in the second half of the year. Yet, Macau’s full-year revenue might mark a 5% drop, as compared to last year’s 2.6% one.
