Barclays decreases Macau gaming GGR growth forecast to 5.1%

Weakness in VIP sector prompted the change.

Barclays' full year 2014E gross gaming revenue (GGR) growth forecast is revised down to 5.1% from 9.9%, primarily reflecting continued weakness in VIP.

According to a research report from Barclays, the forecast could sustain due to the high penetration of the VIP market and also the current environment in China placing more scrutiny on corruption.

Barclays has also revised down itsr full-year 2014 mass GGR growth estimate by 4ppt (from 30.5% to 26.4%) due to the slightly weaker momentum seen since July and the impact from reclassification of SJM premium mass revenues.

Here’s more from Barclays:

We keep our assumption for a 2Q15 Galaxy Macau Phase 2 opening and also a 3Q15 Studio City opening.

We also keep our Wynn Cotai opening assumption at mid-2016, but have pushed back our expectations for the Parisian and MGM Cotai openings to mid-2016 (from early-2016) to be conservative.

We adjust our 2015 total GGR growth forecast to 11.3% (from 13.2%), to reflect marginal VIP growth of 3%, although mass growth continues to be strong at 25%.

With the adjusted assumptions on opening dates, our 2016E GGR growth forecast is now 14.1% (from 15.9%), with 6% VIP growth and 25% mass table revenue growth.