Morgan Stanley Sees Macau October Casino Revenue Roughly Flat, Favors Galaxy and Wynn Macau

Stock News09-24 15:46

Morgan Stanley released a research report indicating that its hotel survey for this year's October Golden Week shows hotel demand roughly flat year-on-year, with occupancy rates 6 percentage points lower than the May Golden Week and 4 percentage points below last October's Golden Week, though average room rates are higher.

The firm notes that softer demand during the October Golden Week may stem from strong Mid-Autumn Festival performance and the close proximity of the two holidays. It expects September casino revenue to grow at a high single-digit rate year-on-year, while October could remain broadly flat.

Morgan Stanley believes that after a year of continuous downward earnings forecast revisions, the industry may be nearing a bottom, although third-quarter and full-year market EBITDA expectations remain elevated. The bank favors GALAXY ENT (00027) and WYNN MACAU (01128), citing their competitive market share, third-quarter EBITDA above market estimates, and higher dividend yields.

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