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Expect GGR Growth to Improve in 2H19 行 我们预计澳门博彩毛收入增速将在 年下半年改善 业 2019

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Expect GGR Growth to Improve in 2H19 行 我们预计澳门博彩毛收入增速将在 年下半年改善 业 2019 股 票 Research 研 究 Equity Sector[Table_BasicInfo] Report: Gaming Sector Noah Hudson 行业报告： 博彩行业 (86755) 2397 6684 [email protected] 16 July 2019 [Table_MainInfo] Expect GGR Growth to Improve In 2H19 行 我们预计澳门博彩毛收入增速将在 年下半年改善 业 2019 报 We forecast Macau gross gaming revenue ("GGR") growth of 3.8% for full year 2019. Year to date through June, Macau's cumulative GGR has Rating:[Table_InvestIn fo] Outperform Maintained 告 Sector Report decreased by 0.5%. However, we are more optimistic on GGR growth in 2H19 since 1) we think that VIP segment growth could bottom out some time 评级： 跑赢大市 (维持) in 2H19, 2) GGR growth has rebounded in the past two months, 3) casino smoking lounges are now in place, and 4) we expect continued organic 2 growth in the mass segment. Stock Performance 股价表现 We expect continued organic growth in the mass segment supported by 10.0 % return a record number of visitors this year. Year to date through May, the total number of visitors to Macau increased by 21.0% yoy to 17.2 mn, and it is 0.0 estimated that cumulative mass segment GGR increased by 17.4% yoy. (10.0) Given the boost from the opening of the Hong Kong-Zhuhai-Macau Bridge on 24 Oct. 2018, Macau visitation in 2019 is on track to easily reach a record (20.0) 证 high. Moreover, after dipping in 3Q18 and 4Q18, the growth rate and (30.0) 告 券 proportion of air arrivals to Macau is now increasing again, which we take as (40.0) 研 报 an indication that higher quality visitors are coming back. (50.0) Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 究 究 Maintain "Outperform" sector rating. Our sector top pick is MGM China HSI SJM Hds. Galaxy Ent. Wynn Macau Research Report (02282 HK), with "Buy" investment rating and a target price of 报 研 Melco Resorts MGM China HK$16.00. We think that MGM China is in a favorable position as MGM Cotai 告 Source: Bloomberg. 券 continues to ramp up. In addition, we recommend to "Buy" Melco Resorts & Equity Entertainment (MLCO US) with a target price of US$23.70. 证 Sector Valuation 我们预计 全年澳门博彩毛收入将增长 。截至 年 月 日，澳门博彩毛 2019 3.8% 2019 6 30 行业估值 收入累计同比下降 0.5%。但我们对 2019 年下半年的增长更为乐观，主要由于：1）预期 EV to BEst EBITDA (Next 4 Quarters) 贵宾分部有望在 2019 年下半年见底回升，2）最近两个月澳门博彩毛收入增速反弹，3） Mean 20 +1 ST. DEV. 赌场吸烟室到位，以及 4）预期中场分部将持续内生增长。 -1 ST. DEV. [ 受到游客数量创新高的支持，我们预期今年中场分部能保持持续的内生增长。截至 2019 T 15 年 5 月底，访澳旅客同比增加了 21.0%至 1,720 万人次；并且预计中场业务毛收入累计同 a 比增加 17.4%。由于 2018 年 10 月 24 日港珠澳大桥通车，我们预计 2019 年访澳旅客将 b 很容易达到历史新高。另外，在 2018 年第 3、第 4 季度的空乘旅客率下降后，现在已开 10 始回升；我们视该数字的增加为高端旅客回访的信号。 博l 我们维持“跑赢大市”行业投资评级。我们的行业首选是美高梅中国（02282 HK），我 彩e 5 行 们给予“买入”投资评级和 16.00 港元的目标价。我们认为随着美狮美高梅业务的持续升 Jul/12 Jul/13 Jul/14 Jul/15 Jul/16 Jul/17 Jul/18 Jul/19 _ 温，美高梅中国相对处于有利位置。另外，我们也同时推荐新濠博亚娱乐（MLCO US）， 业 Source: Bloomberg BIGAMEAX INDEX. L 并给予“买入”投资评级和 23.70 美元的目标价。 Gaming Sector e f Company[Table_CompanyFinance] Name Code Price Rating 19PER 20PER 21PER 19ROE 19P/B 19 Yield t 公司名称 编号 股价(HK$) 投资评级 市盈率(x) 市盈率(x) 市盈率(x) 净资产收益(%) 市净率(x) 股息率(%) M Galaxy Entertainment 00027 HK 55.700 Neutral 18.3 17.3 17.3 19.8 3.4 2.1 a Melco Resorts & Entertainment MLCO US US$23.750 Buy 23.5 19.7 19.7 17.8 4.7 2.9 MGM China 02282 HK 13.540 Buy 20.4 15.9 15.9 23.9 4.8 2.9 r Sands China 01928 HK 40.450 Neutral 19.1 17.4 17.4 47.7 9.1 5.2 g Wynn Macau 01128 HK 18.720 Neutral 16.3 14.6 14.6 329.5 55.9 6.4 Weighted Average i 19.1 17.2 17.2 68.6 12.3 4.0 市值加权平均 n Source: the Companies, Guotai Junan International, Bloomberg. ] See the last page for disclaimer Page 1 of 8 P [Table_PageHeader] Gaming Sector [ We forecast Macau gross gaming revenue ("GGR") growth of 3.8% for full year 2019. Year to date through June, Macau's T cumulative GGR decreased by 0.5%. However, we are more optimistic on GGR growth in 2H19 since 1) we think VIP segment a b growth could bottom out some time in 2H19, 2) GGR growth has rebounded in the past two months, 3) casino smoking lounges l are now in place, and 4) we expect continued organic growth in the mass segment. e _ M We think that VIP segment growth could bottom out some time in 2H19. While Macau's cumulative GGR yoy growth was a essentially flat year to date through June, there is a stark difference between the VIP and mass segments. Year to date through r 16 July16 2019 May (the latest segmental data available), it is estimated that cumulative VIP GGR decreased by 15.2% yoy, while cumulative g i mass segment GGR increased by 17.4% yoy. In the VIP segment, yoy GGR decreased by 23.1% in April, followed by a less n severe decline of 12.7% yoy in May. We think the sharp decline in the VIP segment is largely the result of VIP players being more 1 cautious during the current environment of escalated U.S.- China trade war tension and its potential to negatively impact China's ] economic growth. We see room for China's monetary policy to ease in 2H19, and it also seems likely that the U.S. Federal Reserve (the "U.S. Fed") might lower interest rates sometime in 2H19. A larger money supply would stimulate VIP gaming, not only from greater liquidity, but also an increase in confidence for macro-economic growth. We think that it is more likely than not that VIP segment growth will improve in the coming months. However, we don't hold this view with very strong conviction, since it is far from assured that U.S.- China trade war tension will improve; downside risk would be if the tension worsens. Figure-1: Macau Total GGR Amount & Growth, Annually Figure-2: Macau Total GGR Amount & Growth, Monthly Total GGR (L) Total GGR Growth (YoY) Total GGR (L) yoy (R) MOP (Billion) MOP (Billion) 400 303 314 40% 28 10% 266 5.9% 300 231 223 19.1% 26 4.4% 14.0% 5% 200 20% 1.8% [ 3.8% 100 24 -0.4% T -3.3% 0% - 0% 24 a 22 -5.0% (100) b -8.3% -5% l (200) -20% 20 -34.3% 25 25 26 26 24 e (300) 18 -10% _ (400) -40% M 2015A 2016A 2017A 2018A 2019F a r g Source: Gaming Inspection and Coordination Bureau of Macao SAR. Guotai Source: Gaming Inspection and Coordination Bureau of Macao SAR. 博彩行业 Junan International. i n ector 2 Macau GGR growth rebounded in the past two months. During the first four months of 2019, cumulative GGR decreased by ] 2.4% yoy, and February, given a boost from the Chinese New Year peak season, was the only month with positive yoy GGR S Gaming growth. In the recent two months of May and June, Macau GGR increased yoy by 1.8% and 5.9%, respectively. We think the rebound is the start of a recovery trend that will continue into 2H19, supported by broader coverage of smoking lounges and continued organic growth in the mass segment. Figure-3: Macau VIP GGR Amount & Growth, Monthly Figure-4: Macau Mass GGR Amount & Growth, Monthly VIP GGR YoY (R) Mass GGR YoY (R) MOP (Billion) MOP (Billion) 28.0% 15 30% 15 30% 18.5% 23.4% 14 20% 14 10% 20% 13 -1.7% 13 14.7% 12.0% 0% 12.2% 10.6% 12 -17.5% -12.7% 12 -20.2% -10% 10% -23.1% 11 -20% 11 14 13 13 12 13 12 12 13 11 15 10 11 -30% 10 15 0% Report Source: Bloomberg. Source: Bloomberg. Sector See the last page for disclaimer Page 2 of 8 P [Table_PageHeader] Gaming Sector [ Casino smoking lounges are now in place. In addition, Macau's new smoking ban went into effect on 1 January 2019, whereby T smoking was banned in all areas inside casinos (including VIP rooms) with smoking allowed only in new government approved a high standard smoking lounges. We think that GGR was negatively impacted during 1Q19 as many casinos were not yet ready for b l the new smoking ban. However, the approved smoking lounge coverage will be much broader during 2H19. For example, as of 31 e May, the Macau Bureau of Health had approved a total of 556 smoking lounges in a total of 31 casinos, 10 more smoking lounges _ as compared with the end of April. M a r We expect continued organic growth in the mass segment. Year to date through May (the latest segmental data available), it g July16 2019 is estimated that cumulative mass segment GGR increased by 17.4% yoy. We expect the strong growth in visitation numbers to i n continue during 2H19. We think that new attractions at casino resorts will attract more gamers. For example, Melco Resorts & 1 Entertainment (MLCO US, "Melco") will be making property enhancements and adding new attractions at City of Dreams and ] Studio City. Mass GGR growth will also be supported by a record breaking number of visitors this year We expect Macau visitation to reach a historical high in 2019.
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