{"id":181456,"date":"2021-07-30T12:46:48","date_gmt":"2021-07-30T19:46:48","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=181456"},"modified":"2021-07-30T15:13:34","modified_gmt":"2021-07-30T22:13:34","slug":"macau-casino-stocks-can-bounce-back-says-morgan-stanley","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/macau-casino-stocks-can-bounce-back-says-morgan-stanley\/","title":{"rendered":"Morgan Stanley Sees Bright Future for Macau Stocks, Mixed on Beijing Regulations"},"content":{"rendered":"

Shares of Macau concessionaires continue sagging. But Morgan Stanley is bullish on the long-term outlook for the world’s largest casino center. That’s even as some investors fret about regulatory risk from Beijing.<\/p>\n

\"macau
Wynn Macau, seen above, was one of the many venues there hampered by travel issues. Morgan Stanley sees the casino center bouncing back. (Image: NPR<\/em>)<\/figcaption><\/figure>\n

Recent gross gaming revenue (GGR) data suggests that despite an increase in COVID-19 cases in the neighboring Guangdong province and the persistent lack of a travel bubble with Hong Kong, things are starting to trend the right way for Macau. But those are considerable overhangs to overcome, and likely explain the 2021 lethargy in related operator equities.<\/p>\n

We think initial underperformance can be explained by new Covid cases in Guangdong in June and no travel relaxation between Hong Kong and Macau,\u201d<\/strong> said Morgan Stanley analysts.<\/p><\/blockquote>\n

Like their US counterparts, Macau operators proved adept at cutting costs and boosting margins<\/a> as a result of the coronavirus pandemic. Led by a 46 percent slashing at Melco Resorts & Entertainment (NASDAQ:MLCO), Macau operators, on average, trimmed operating costs by 35 percent since the health crisis started.<\/p>\n

As such, Morgan Stanley forecasts the companies need GGR to return to just 80 percent of pre-pandemic levels to get earnings before interest, taxes, depreciation and amortization (EBITDA) back to 2019 highs.<\/p>\n

\u201cWe remain constructive in the hope of the border opening and eventual extension of licenses, both of which we expect in second-half 2021,\u201d said the bank.<\/p>\n

Regulatory Clouds Need to Part<\/h2>\n

In an effort to improve consumer outcomes and reduce monopoly potential, Beijing is cracking down on Chinese internet companies, particularly those with heavy consumer-facing businesses.<\/p>\n

\n

The result is a calamity for global investors<\/a> as hundreds of billions of market value have been wiped off companies, such as Alibaba, Didi, Meituan, and Tencent. Earlier this week, Beijing called an emergency meeting with major international asset managers and investment banks, looking to assuage fears about the regulatory clampdown. While Macau concessionaires aren’t targets of the probe, Morgan Stanley points to something of a mixed near-term outlook as a result of that overhang.<\/p>\n<\/div>\n

\u201cWe believe the recent launch of China\u2019s \u2018common prosperity\u2019 plan is not supportive of gaming in Macau, but a hardened stance on gambling (especially overseas) is not new either,\u201d said analysts at the bank.<\/p>\n

Prevailing wisdom is that Beijing isn’t looking to end land-based gaming in Macau, but rather to eradicate online gaming, which is forbidden in the world’s second-largest economy.<\/p>\n

Renewal Outlook<\/h2>\n

All six concessionaires are supposed to be up for license renewal in 2022. But that process is being delayed because of the pandemic. Morgan Stanley says it’s likely Macau will extend all gaming licenses for another three years before a more conventional retendering process commences in 2025.<\/p>\n

Some experts estimate that without renewal of the individual visit scheme (IVS) visa and with the current travel protocols, up to 47 percent of prior Macau visitation is out of the picture for the time being.<\/strong><\/p>\n

In the meantime, the special administrative region (SAR) appears to loathe to consider<\/a> another casino shutdown to deal with the pandemic. But that also implies travel restrictions are likely to remain in place.<\/p>\n","protected":false},"excerpt":{"rendered":"

Shares of Macau concessionaires continue sagging. But Morgan Stanley is bullish on the long-term outlook for the world’s largest casino center. That’s even as some investors fret about regulatory risk from Beijing. Recent gross gaming revenue (GGR) data suggests that despite an increase in COVID-19 cases in the neighboring Guangdong province and the persistent lack […]<\/p>\n","protected":false},"author":46,"featured_media":181457,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[69069,62],"tags":[],"acf":[],"yoast_head":"\nMacau Casino Stocks Can Bounce Back, Says Morgan Stanley<\/title>\n<meta name=\"description\" content=\"Macau gaming equities face array of near-term issues, but Morgan Stanley is long-term bullish on the group.\" \/>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Macau Casino Stocks Can Bounce Back, Says Morgan Stanley\" \/>\n<meta property=\"og:description\" content=\"Macau gaming equities face array of near-term issues, but Morgan Stanley is long-term bullish on the group.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/macau-casino-stocks-can-bounce-back-says-morgan-stanley\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2021-07-30T19:46:48+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-07-30T22:13:34+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/07\/macau-2-1024x642.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"642\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/macau-casino-stocks-can-bounce-back-says-morgan-stanley\/\",\"url\":\"https:\/\/www.casino.org\/news\/macau-casino-stocks-can-bounce-back-says-morgan-stanley\/\",\"name\":\"Macau Casino Stocks Can Bounce Back, Says Morgan Stanley\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/macau-casino-stocks-can-bounce-back-says-morgan-stanley\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/macau-casino-stocks-can-bounce-back-says-morgan-stanley\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/07\/macau-2.jpg\",\"datePublished\":\"2021-07-30T19:46:48+00:00\",\"dateModified\":\"2021-07-30T22:13:34+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Macau gaming equities face array of near-term issues, but Morgan Stanley is long-term bullish on the group.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/macau-casino-stocks-can-bounce-back-says-morgan-stanley\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/macau-casino-stocks-can-bounce-back-says-morgan-stanley\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/macau-casino-stocks-can-bounce-back-says-morgan-stanley\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/07\/macau-2.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/07\/macau-2.jpg\",\"width\":2482,\"height\":1556,\"caption\":\"Wynn Macau, one of the many venues there hampered by travel issues. 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