Macau gaming: June GGR far exceeds expectations

Star concerts and new properties surpass seasonal slump. According to the Gaming Inspection and Coordination Bureau (DICJ), June’s GGR reached MOP21.1bn, up 19% YoY but slightly down by 0.6% MoM, far surpassing market expectations of MOP19.4bn. The average daily GGR stood at MOP 702mn, rising  3% MoM and significantly outperforming the 2015-2019 June average decline of 12%. We attribute the strong performance to 1) high-profile concerts, such as Jacky Cheung’s (June 20-23 and 27-29) and G-Dragon’s (June 6-8); 2) property enhancements, including Sands China’s fully renovated ‘The Londoner’ by Sands China in April, and the opening of Capella Hotel by Galaxy Entertainment in May, which helped offset seasonal weakness.

Gov’t MOP228bn full-year target looks conservative. 2Q25 gaming revenue grew 8% YoY to MOP61bn, setting the highest quarterly level since the pandemic. Notably, each month in the quarter exceeded market expectations and defied seasonal trends. In May, the Macau government revised its full-year 2025 GGR forecast down to MOP228bn from MOP240bn in May, implying a modest 0.5% YoY growth. To meet this target, the market would need to sustain an average monthly GGR of MOP18.2bn in 2H25. Given that 2H24’s monthly average was already MOP18.8bn, we believe this target  to appear conservative.

Our view: The summer vacation (July-August) is a traditional tourism peak. Coupled with major concerts by Eason Chan (陳奕迅),  Aaron Kwok (郭富城), and standup Jimmy O Yang (歐陽萬成) over the next two months, tourist volume is expected to maintain momentum (up ~15% YoY in 5M25), and gaming revenue is likely to exceed 2024’s level.

Our sector’s pick is Galaxy Entertainment (27 HK, HK$36.85, HK$161bn) given its leading position in non-gaming diversification. The 16,000-seat Galaxy Arena, equipped with cutting-edge technology, has secured exclusive events, driving cross-business synergies with its gaming operations. We also like MGM China (2282 HK, HK$13.52, HK$51bn), as its valuation of ~ 11x FY25 P/E is lower than (industry?? Or its own??) average ~16x P/E despite robust performance since 2024. (Ensley LIU)