Risk of ‘consensus downward revision’ on Macau earnings, with investors lukewarm on sector: CLSA

There is currently “lukewarm investor enthusiasm” when it comes to Macau gaming stocks, with focus on gross gaming revenue (GGR) market share and dividends, says brokerage CLSA Ltd. The commentary was in a Tuesday note about the institution’s recent Investors’ Forum 2026. “Risks of consensus downward revision” of Macau-industry earnings “has escalated, in our view,” noted the brokerage. In mid-September CLSA had already trimmed its 2027 and 2028 forecasts for Macau earnings. The brokerage retained its “cautious view” on Macau GGR, which it currently forecasts to decline 0.9 percent year-on-year to MOP65.5 billion (US$8.11 billion) in the fourth quarter. CLSA analyst Jeffrey Kiang wrote: “From our meetings with investors at our 33rd Investors’ Forum, investors’ enthusiasm on Macau gaming remains lukewarm, and they do not see imminent signs that might reaccelerate gaming revenue growth.” He also observed: “China’s new offshore trust tax rules do not help.” Mr Kiang added: “ We remain cautious following our recent cut in 2027 gross gaming revenue forecast to 2 percent year-on-year” growth, to to MOP259.2 billion. He noted that at this growth rate, “there is limited room for margin expansion” among Macau’s six gaming operators, “as operating expenses and [player] rebates likely grow at a faster pace.” The sector was trading at 8.4 times 2027 enterprise value/earnings before interest, taxation, depreciation and amortisation (EBITDA), stated the institution. CLSA’ s memo said that amid a backdrop of “modest revenue growth” in the Macau market, “investors are concerned competition” among Macau licensees – despite being, in the brokerage’s word, “rational” – will “weigh on concessionaires’ profitability”. As a result, GGR market share “has been a key focus,” said the institution. “In July and August, our channel check data” suggested table GGR market share for Galaxy Entertainment Group Ltd and Sands China Ltd “picked up sequentially versus second-quarter 2026”. MGM China Holdings Ltd’s table GGR share remained steady in July and August, “defying weak seasonality thus far,” suggested CLSA. Meanwhile, investors “continue to look for companies with growing dividends, as balance sheet strength grows and investment opportunities in the region diminished,” stated Mr Kiang.