"Big Banks" JP Morgan: Macau's October gaming revenue exceeds expectations, expected to slow down to 8% to 10% growth in November

JP Morgan's research report indicates that Macau's total gaming revenue in October was MOP 24 billion, representing a year-on-year growth of 16% and a month-on-month growth of 32%, marking the strongest gaming performance in six years. The gaming revenue from the mass market and VIP rooms has recovered to approximately 125% and 35% of pre-pandemic levels, respectively. Although the performance during this year's Golden Week was relatively subdued, October's gaming revenue still exceeded market expectations by 11% to 12%. Specifically, the VIP business grew by 40% to 45% driven by VIP rooms and high-end mass market, while the mass market business grew by 12% to 13%.

Looking ahead, the bank believes that November will face a tougher comparison base than October, and the growth rate may slow to 8% to 10%. However, starting in December, the comparison base will become more lenient, and gaming revenue growth is expected to accelerate to 15% to 17%, with at least low double-digit growth anticipated in the first quarter of next year.

In terms of stocks, the bank is optimistic about WYNN MACAU (01128.HK) in the short term due to its attractive valuation and high leverage; it is optimistic about Sands China (01928.HK) in the medium term, as there is an opportunity to raise dividends in February next year, and it is expected to continue expanding market share in the fourth quarter of this year. In the long term, the bank is optimistic about GALAXY ENT (00027.HK), which has both value advantages and long-term growth potential. All of the above stocks are rated "Overweight," with target prices of HKD 8, HKD 24.5, and HKD 48.5, respectively