HSBC expects Macau's gaming revenue in June to rise by 11% to 15% year-on-year, recommends buying MGM CHINA and GALAXY ENT

HSBC's research report indicates that from June 1 to June 22, Macau's total gaming revenue (GGR) recorded MOP 14.8 billion. The average daily gaming revenue from June 16 to June 22 remained stable at MOP 686 million, with the VIP room win rate slightly decreasing to between 2.9% and 3.2%. However, the mass market performance was robust, which the bank believes was driven by the concert of Jacky Cheung. Assuming the average daily revenue for the remainder of June is between MOP 620 million and MOP 700 million, the total gaming revenue for the month could reach between MOP 19.7 billion and MOP 20.4 billion, representing a year-on-year increase of 11% to 15%.

Additionally, regarding the three gaming companies that have closed some satellite casinos, the report mentioned that the relevant gaming companies have held job fairs to hire affected employees, while shop owners in the vicinity of the satellite casinos have also requested an extension of the transition period. The gaming companies and the government have yet to respond.

The bank remains optimistic about MGM China (02282.HK) due to its strong return on invested capital, believing that the company's strong execution capabilities and high operational efficiency should drive more resilient performance in a more challenging operating environment; the target price is HKD 14.5, with a "Buy" rating. The bank is also optimistic about Galaxy Entertainment (00027.HK), as the group is accelerating the progress of its Phase III project, with the Galaxy Macau's Galaxy Hotel expected to launch in mid-year, which should support its market share increase; the target price is HKD 41.5, also with a "Buy" rating