Wynn Macau Earnings: Decent Recovery Across Segments, Further Uptick in May Golden Week

Wynn Macau’s decent sales recovery was in line with industry performance, with revenue reaching 48% of 2019 levels, despite a lower win rate compared with 2019 and renovation closures at its peninsula property. A favorable mix shift toward the high-margin mass business, along with disciplined cost management, also drove its EBITDA margin to 26% in the first quarter. Management indicated further uptick across segments into the second quarter, with both mass and direct VIP gaming volume well above 2019 levels during the May golden week, and hotel occupancy rate at 95%. With transportation capacity continuing to recover, we expect Wynn Macau to extend robust growth momentum in coming quarters. We keep our 2023 revenue forecast at HKD 19 billion, or 52% of 2019 levels, but lift our 2023 EBITDA margin assumption to 26%, up from 13% in our earlier forecast, to incorporate a strong margin expansion outlook. This leads to a rise in adjusted EBITDA to HKD 4.9 billion in 2023, and a rise in our fair value estimate of Wynn Macau to HKD 8.60 per share from HKD 8.00.