Macau’s VIP segment is headed for 7 percent growth in the full-year 2017, but will sway due to difficult comparisons through the year, said Bernstein in a note on Friday.
“The strong VIP performance in late 2016 and early 2017 has mainly been driven by accelerated capital outflows from China, strong liquidity in China and the strength in China’s real estate market. These factors which supported VIP growth, however, are short-term catalysts rather than long-term structural benefits.”
Bernstein says it estimates VIP to continue strong growth in 17H1 of 17 percent (partly on easier year-on-year comparisons), but then drop to negative growth of -3% year-on-year in 17H2 (especially on more difficult Q4 comparisons).
Looking at recent VIP performance in Macau, Galaxy and Wynn will have the most exposure to VIP on a top line basis, added the brokerage.
There are however, potential headwinds in the VIP and premium mass market, according to Bernstein, including a continued anti-corruption campaign, RMB depreciation, China capital outflow roadblock and increased junket and VIP regulations.