Skip to Content

Melco Resorts and Entertainment Ltd ADR MLCO

Rating as of

Morningstar’s Analysis

Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price


5-Star Price


Economic Moat


Capital Allocation


Despite Rising COVID-19 Cases, Macao's Recovery Is Intact Amid Accelerating Vaccination Rollouts

Jennifer Song Senior Equity Analyst

Analyst Note

| Jennifer Song |

Macao gaming companies have underperformed the broader market over the past two months, with share prices falling 10%-16%, compared with the flat Hang Seng Index. We think this reflects market concern about the rising COVID-19 cases in mainland China and surrounding regions, which may further slow the pace of Macao’s recovery. Despite the near-term challenges, management comments on an uptick in May Golden Week traffic and gradual improvement in month-on-month gross gaming revenue, or GGR, are encouraging. In addition, interest in vaccination is increasing after the pandemic has spiked in several countries over the past few months. The vaccine rollout in mainland China, which contributes about 70% of Macao’s tourism traffic, is also gaining speed, with daily vaccination rates rising to 16 million-17 million doses recently from 4 million-5 million doses two weeks ago. We think China’s target for herd immunity looks achievable by the end of 2021, supporting a foundation for a sustainable recovery of Macao's gaming sector.

Read Full Analysis

Company Profile

Business Description

Melco Resorts is one of only six companies with a licence to operate casinos in Macao, the only region in China with legalized gambling. It operates Altira, a complex focused on VIP customers; City of Dreams, an integrated resort in Cotai serving both mass-market and premium-end patrons; and Mocha Clubs electronic gaming machines. In addition, the company also has a majority interest in Studio City, a new casino in Cotai that opened in October 2015. Outside Macao, Melco also owns City of Dreams Manila in Philippines, and 75% stake in City of Dreams Mediterranean in Cyprus. The business mix in term of adjusted EBITDA was about 84% from Macao, and the rest largely from Philippines as of 2019.

60 Wyndham Street, 36th Floor, The Centrium
Hong Kong, Hong Kong
T +852 25983600
Sector Consumer Cyclical
Industry Resorts & Casinos
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 19,746

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.