Gaming likely to deliver 10% growth for March

It exceeds initial expectations.

According to Barclays, average table revenues for the 24-30 March period returned to HK$1.1bn per day, compared to previous week (17-23 March) at HK$996mn, and the week prior (10-16 March) to that at HK$886mn.

If we add in a slot revenue assumption of HK$1.1bn for March, we estimate that full month total gross gaming revenue would be HK$33.6 bn, with growth of +10.3% y/y, slightly better than our previous estimate of high single-digit % growth. And we estimate 1Q14 y/y GGR growth to come in at +18.8% y/y.

Here’s more from Barclays:

After March, we expect the 2Q14 base comparison effect to ease, and we look for a resumption to 16% y/y growth for 2Q13, and continue to look for 15% growth for the full year 2014.

For the next few months, we have GGR y/y growth forecasts of 12% for April, 23% for May and +13% for June.

Over the past month, the stock prices of the six major casino operators have been down by 13% on average (vs Hang Seng Index down 3%).

We believe March’s slower growth was due to a base effect and that fundamental growth for the sector has not changed.

We maintain our positive view on Macau gaming, maintaining our 15% GGR growth forecast for 2014.