More Macau visitors not bringing extra GGR, as 3Q casino EBITDA likely down 11pct y-o-y: CLSA

Brokerage CLSA Ltd expects the Macau gaming sector’s third-quarter reported earnings before interest, taxation, depreciation and amortisation (EBITDA) to have fallen 11 percent year-on-year, to just under US$1.84 billion. Analyst Jeffrey Kiang stated in a Monday note that such decrease was “amid a 3.8 percent year-on-year decline” in the sector’s third-quarter gross gaming revenue (GGR) to MOP60.21 billion (US$7.45 billion) Though he stated: “Headwinds on margins should be mitigated by above-normal VIP win rates in the quarter, which we see as temporary support.” Mr Kiang added: “Our neutral view over the next six months remains unchanged, and we still think there is minimal room for margin expansion amid a marginal GGR growth ahead.” Referring to a category of Macau tourist that analysts typically see as most valuable to the city’s gaming industry, CLSA stated: “In July and August, Macau’s overnight visitations contracted 2.5 percent year-on-year to 3.05 million, whereas the GGR per overnight visitor remained broadly stable year-on-year. “Nonetheless, Macau’s total visitations grew 4.5 percent year-on-year to 8.02 million across July and August. This indicates more day trippers have not translated into higher total GGR.” The brokerage said – citing channel checks – that Macau’s VIP win rate should be “above normal level” in the third quarter, i.e., “between 3.00 percent to 4.10 percent across most weeks in the quarter”. Mr Kiang added: “Sequentially, we forecast Macau’s reported EBITDA as a percentage of total GGR to slightly expand from 24.2 percent in second-quarter 2026 to 24.6 percent in the third quarter. But this is still below third-quarter 2025. “We don’t expect third-quarter 2026 results to change our neutral view on the sector over the next six months.” He also noted, referring to Macau gaming performance following the October Golden Week holiday period, from October 1 to 7: “Data post-Golden Week are a crucial read-through for GGR in 2027.” Macau’s visitor tally for this year’s October Golden Week stood at just above 1.14 million, showed official data. The daily average for the reporting period was above 163,320 arrivals, higher than last year’s average of 143,090, which itself had been an October Golden Week record. On Saturday Macau’s leader, Chief Executive Sam Hou Fai, said October GGR performance would be a guide as to whether the city would achieve the local government’s 2026 GGR forecast of MOP236 billion. The annual estimate on GGR – revenue which attracts an effective 40 percent tax rate – is used as a guide for the city’s public spending budget.