Hong Kong Casino Stocks Rise as Macau Gaming Revenue Notches Best January Since 2020

By Kimberley Kao

Hong Kong-listed casino stocks rose after Macau's gaming revenue posted its second-best monthly performance since the pandemic, helped by increasing numbers of visitors to the Asian gambling hub.

Gross gaming revenue rose 67% in January from a year earlier to 19.34 billion patacas ($2.40 billion), Macau's gaming regulator said Thursday. That ranks just behind October's revenue as the highest level since January 2020.

Shares of gaming companies handily beat a 0.5% rise in Hong Kong's benchmark index. Shares of Melco International ended 6.9% higher, while Galaxy Entertainment, MGM China, Wynn Macau and Sands China added 5.9%, 5.7%, 4.1% and 4.2%, respectively.

The January revenue "defied normal seasonality" and slightly beat forecasts, Citi analysts wrote in a research note.

Visitors to Macau nearly quintupled in 2023 to 28.2 million people, according to government data. That is a step closer to prepandemic levels; 39.4 million people visited in 2019.

Analysts at S&P Global Ratings forecast Macau's mass-market gaming revenue this year to outperform 2019 pre-Covid levels by 5%-15%, according to a recent report. They also expect a 20%-30% increase in mass revenue, driven by increased visitors and expanded hotel capacity.

"Positive trends in the mass market will help operators further recover Ebitda and cash flows, and support deleveraging," Aras Poon, an associate director with S&P, said in an email.

Write to Kimberley Kao at kimberley.kao@wsj.com

(END) Dow Jones Newswires

February 01, 2024 06:18 ET (11:18 GMT)

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