Bernstein raises 17Q1 expectations

Bernstein has revised its GGR estimates for the first quarter of 2017, forecasting 10 percent growth, led by 12.5 percent growth in VIP and 9 percent growth in mass.

“While stabilization in Mass GGR had been a theme we had been preaching since late 2015, the second half of 2016 saw Mass GGR recovery in full swing while VIP surged at 10 percent year-on-year growth in Q4. In Q4 industry-wide EBITDA grew 17 percent year-on-year (4 percent quarter-on-quarter) for the six Macau operators – the second consecutive quarter of year-on-year growth since 2014.”

The brokerage says it estimates industry-wide EBITDA to increase 19 percent year-on-year in 17Q1.

For the full year 2017, Bernstein estimates GGR growth of 8 percent, made up of mass year-on-year growth of 11 percent and VIP growth of 5 percent, along with EBITDA growth of 11 percent.

Bernstein notes that the VIP segment will continue strong growth in 17H1 of around 13 percent year-on-year, but then drop to negative growth of -3 percent year-on-year in 17H2 as liquidity drivers begin to ease.

“Our long-term forecast is for VIP to achieve a CAGR of 3 – 4 percent through the end of the decade (2016-2020E). However, government policy could create a significant deviation from those figures and volatility could be considerable,” said the brokerage.

Mass on the other hand will see stable growth over the entire year, with capacity improvements, improved infrastructure, increasing overnight visitation and higher spend per visitors driving continued mass growth.