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In an interview with Bloomberg, Credit Suisse Group AG Hong-Kong-based analyst Gabriel Chan provided a less-than-optimistic outlook for Macau casino stocks in the short term, compared to all the overly optimistic news that relates to the world’s largest gambling Mecca and its seemingly endless revenue stream.
When we say “less-than-optimistic”, it’s hardly a damper where Macau is concerned.
“It is a short-term correction,” Chan said, noting that the market continues to grow.
“Demand growth is outpacing supply growth,” he added during an interview with Bloomberg News.
Other analysts continue to upgrade their profit forecasts for properties like James Packer’s Crown Ltd. His results were missed, however, the overall Macau market has been explosive so far in 2011.
Macau gaming revenues to mid-May were up 43 per cent in the March quarter.
Citigroup said it had lifted its earnings forecasts for Crown to reflect the strong trends.
Citi issued this statement: "Crown offers cheap entry into Macau. At yesterday's close, Crown's stake in Melco Crown was valued at $1.6 billion, well ahead of the $US500m invested by Crown," the broker said.
"Crown remains cheap relative to global peers. It offers Macau exposure and also solid cashflows from its domestic casinos, which operate in stronger economic conditions than its US-listed peers."
Casino mogul Steve Wynn is among the Macau beneficiaries. He recently opened a high class casino resort property called Galaxy.
“I think that the Macau market growth rate for the first quarter will be exceeded in the future because of Galaxy," Wynn said.
- Aaron Goldstein, Gambling911.com
