[ET Net News Agency, 21 November 2017] Credit Suisse said the fundamental of Macau
gaming industry seems to be trending stronger than expectation in 4Q, after an uninspiring
3Q with a weaker mass (decelerated to 9% from 1H 15%).
It noted that November GGR is tracking 20-22% growth with 4Q also now on track to grow
20% led by a very strong VIP and stabilising mass. Suncity (Macau top junket) saw November
volume +30% and expects a 20% growth for 2018. Annualising 4Q GGR into 2018 would
translate into 9% growth for next year (vs street expectations of 9% and CS's 14%).
Meanwhile, mass segment gradually stabilised into 4Q - after decelerating into 9% growth
in 3Q, mass GGR is tracking at low-teens growth, based on Credit Suisse's estimates. The
slower 3Q mass is also due to the longer-than-expected impact from typhoon.
While the valuation continues to look fair at 14x EBITDA, the strong GGR momentum,
broader bullish market sentiment and street's low expectations would support share price.
Credit Suisse suggested that accumulating Galaxy Entertainment (00027) into 2018 with
multiple structural drivers. (KL)