Analysts Praveen Choudhary, Thomas Allen and Gareth Leung commented that “as COVID-19 has spread globally and travel restrictions have tightened across the globe, we delay normalization to October.”
“While consensus may expect 2021 to be similar to 2019, we believe there may be lingering concerns on group travel and entertainment, which could continue to weigh on the mass business (especially table games) for longer,” they added.
“While a weaker quarter in 2020 should not matter if our price targets are pegged to 2021, there is growing concern that our 2021 EBITDA may not reach back to the last peak in 2019. We expect things to normalize by October and VIP to recover faster than the mass segment,” the analysts concluded.
Nearly all of Macau’s roughly 40 casinos are currently operational – a few are being used as quarantine centers for screening and treating coronavirus patients – but the Special Administrative Region (SAR) is still enduring strict restrictions.
Those protocols were implemented as a means of stemming the spread of the coronavirus. It’s a gambit that initially proved effective, as Macau went almost 40 days without a new reported case of the respiratory illness. However, earlier this month, three new cases emerged in a matter of days, prompting authorities there to ban all travelers from Europe from entering the SAR.
For wary investors and beleaguered operators, the key over the near-term is being patient, a scenario that could be easier if high-end players return to Macau sooner than expected.
Source: GMB
