Herd immunity coming soon, Macau can reach full recovery in 2022, says research firm



Gaming equities with heavy exposure are lagging their Las Vegas-centric and regional counterparts this year. Two major examples are Las Vegas Sands and Melco Resorts & Entertainment.


Shares of two are off 3.15% and 6.52% year-to-date. Encouragingly, some analysts believe near-term headwinds will be transitory and Macau’s rebound efforts will gain momentum.


“Despite the near-term challenges, management comments on an uptick in May Golden Week traffic and gradual improvement in month-on-month gross gaming revenue are encouraging,” writes Morningstar analyst Jeniffer Song in the latest report.


is vital to Macau’s rebound because China accounts for 70% of tourism to the gaming hub. Plans to establish a travel bubble with Hong Kong are also essential but have been hindered due to COVID-19 case increase.


Macau would recover faster than other Asia-Pacific markets


Analysts almost universally suggested that Macau’s industry would recover more rapidly than competing Asia-Pacific markets or Las Vegas.


With problems issuing individual visit scheme and slow progress on the vaccination front, some research firms are dialing back expectations for when Macau’s gaming-dependent economy will return to pre-pandemic highs. Moody’s Investors Service recently said that won’t happen until 2024.


With daily vaccination rates soaring from 16 million to 17 million from four million to five million two weeks ago, and herd immunity reachable by the end of this year, Morningstar sees a full recovery taking shape in 2022.


The research firm covers each of the six Macau concessionaires and says SJM Holdings is its preferred idea, citing “potential market share gain, financial health, and valuation attractiveness.”

Editing by Rachel Hu

胡芮秋

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