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Wynn Macau Ltd 01128

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Morningstar’s Analysis

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Rising COVID-19 Cases in Hong Kong Dampen Market Sentiment, but Little Impact to Macao’s Recovery

Jennifer Song Equity Analyst

Analyst Note

| Jennifer Song |

Today’s pullback in Macao gaming companies’ share prices of 3.2%-6.5% was largely driven by the news of rising COVID-19 cases in Hong Kong and the delay of an air travel bubble between Hong Kong and Singapore, which has dampened market sentiment. However, we expect limited impacts to the sector’s near-term outlook and long-term prospects, which are primarily driven by recovery of tourism traffic from mainland China, as well as China’s expanding prosperity. We maintain both our earnings forecasts and fair value estimates for the six Macao gaming companies. We continue to expect Macao's gaming sector to return to profitability in the fourth quarter of 2020, and a full recovery to pre-pandemic 2019 levels by early 2022, underpinned by our base case view for a COVID-19 vaccine to be available by mid-2021.

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Company Profile

Business Description

Wynn Macau operates integrated casino resorts in Macao. Wynn Macau and Encore, on the peninsula, boasted 376 gaming tables and 804 slots at the end of 2016. The firm also has two hotels with 1,008 rooms and 57,000 square feet of retail space featuring high-end brand-name stores. The HKD 34 billion Wynn Palace, situated in Cotai, had 296 tables and 906 slots at the end of 2016. It has 1,706 rooms and 105,000 square feet of high-end retail area. Wynn Resorts has a 72% stake in Wynn Macau.

Contact
Rua Cidade de Sintra
Nape, Cayman Islands
T +853 28889966
Sector Consumer Cyclical
Industry Resorts & Casinos
Most Recent Earnings
Fiscal Year End Dec 31, 2020
Stock Type
Employees 13,400