JP Morgan analysts report a "soft" January for Macau gaming revenue, citing a pre-Lunar New Year lull. Will the slowdown impact full-year GGR targets?
Macau's casino gross gaming revenue (GGR) experienced a 5.6 percent year-on-year decline in January, reaching just over MOP18.25 billion (US$2.27 billion, approximately PHP 126.5 billion) according to official data released on Saturday. While this figure represents a slight 0.3 percent increase compared to December's MOP18.20 billion (US$2.26 billion, approximately PHP 126.2 billion), analysts are pointing to a noticeable pre-holiday lull as the primary cause for the softer-than-expected results.
JP Morgan Securities (Asia Pacific) Ltd highlighted the "soft" January GGR performance in a memo, noting a significant slowdown in traffic, particularly affecting larger properties, in the lead-up to the Lunar New Year. Analysts DS Kim, Mufan Shi, and Selina Li explained that this pre-holiday dip offset a strong start to the month, ultimately leading to the GGR shortfall.
The Lunar New Year, which began on January 29th and prompted an eight-day holiday in mainland China, is typically a peak season for Macau's tourism and gaming sectors. This year, however, the pre-holiday period appears to have dampened enthusiasm.
Despite the January dip, JP Morgan's analysis suggests a strong recovery in the mass market, with GGR indicating a recovery of "110-percent-plus in mass versus circa 20 percent in VIP, if compared to pre-Covid levels." These recovery rates are similar to those observed in the fourth quarter of 2024, the brokerage noted.
Following the Lunar New Year holiday's commencement, JP Morgan observed a sharp rebound in visitor arrivals to Macau from January 31st onwards. They also reported solid booking quality, suggesting that the January slowdown might be a temporary blip rather than a sign of a lasting trend.
Looking ahead, JP Morgan anticipates a daily GGR run-rate of MOP800 million to MOP850 million (US$99.4 million to US$105.6 million, approximately PHP 5.5 billion to PHP 5.9 billion) for the first nine days of February, with peak holiday days exceeding MOP1 billion (US$124.3 million, approximately PHP 6.9 billion*) per day. They project February GGR to grow by 3 percent to 5 percent year-on-year, reaching over MOP19 billion (US$2.36 billion, approximately PHP 131.4 billion). This would result in relatively flat GGR for the first two months of 2025 compared to the same period last year.
Despite the relatively slow start to the year, JP Morgan remains optimistic about the overall outlook for Macau's gaming revenue. They believe the industry can still achieve approximately 5 percent GGR growth in 2025, driven by stronger performance in the latter half of the year due to easier year-on-year comparisons.
For context, Macau's accumulated casino GGR for the full year 2024 reached MOP226.78 billion (US$28.18 billion, approximately PHP 1.57 trillion), representing a substantial 23.9 percent increase year-on-year.
Read related article: Macau's Gaming Revenue Outlook Hinges on Chinese New Year Holiday
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