COVID-19 lag sees analysts revise down 2021 Macau GGR estimates

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Macau gaming analysts have revised down their GGR estimates for the remainder of 2021 as the SAR continues to face headwinds from COVID-19 spot fires across mainland China and a slower than expected reopening of the border with Hong Kong.

The revised estimates follow publication of Macaus July GGR results on Sunday, with revenues up 29.2% over June but still down 65.6% versus July 2019 at MOP$8.44 billion (US$1.05 billion). Analysts had been predicting a decline of closer to 60%.

Julys results saw Deutsche Banks Carlo Santarelli revise down its estimates for the September quarter by 21.0% from US$4.28 billion to US$3.38 billion. The new estimate would represent a 62% decline on 3Q19 but 452% improvement over the same period last year.

Santarelli has also altered his FY21 estimates by 19.9% from US$16.52 billion to US$13.23 billion down 64% on 2019 but 75% higher than 2020. Both 2022 and 2023 estimates remain largely unchanged.

Analysts from brokerage Bernstein remain more bullish with 2021 GGR estimated to reach around 50% of 2019 levels up 144% year-on-year.

However, in a Sunday note, Vitaly Umansky, Louis Li and Kelsey Zhu said impediments remain for Macau with quarantine requirements currently in place for 11 cities in five mainland China provinces, although none are located in Guangdong Province which accounts for around 50% of all mainland China revenue.

And while the last week of July saw daily arrivals and departures increase 12% over the previous week, it seems unlikely the border with Hong Kong will open anytime soon a stark contrast to earlier moves by Macau officials to implement a blue health code system by mid-July.

The number of new daily COVID cases remained low with two cases by July 30, and the city has had no local cases for 55 days, the Bernstein analysts said.

However, the Macau/HK travel bubble is likely to be postponed until Hong Kong can open its border with the mainland, according to Hong Kongs Chief Executive.