Macau gaming sector's revenue soars 19.6%

Thanks to Sands' and Galaxy's stellar performance.

According to Maybank Kim Eng, Macau's gross gaming revenue (GGR) for the month of December 2012 was valued at MOP28.2b, up 19.6% YoY and 13.5% MoM.

Here's more from Maybank Kim Eng:

The figure came in strongly above estimates and once again broke the all-time GGR record that was set in October 2012 (MOP27.7; 3.2% YoY).

Overall accumulated GGR for the year totaled MOP304.1b for 2012, up 13.5% from 2011’s MOP267.9b, which came in 1pp higher that our estimates.

The strong set of numbers underscores our optimism, albeit selectively, for the Gaming sector as China continue on it path of recovery in 2013 with the conclusion of the leadership transition.

Our two top picks Sands and Galaxy once again broke new highs to close at HKD35.75 and HKD31.30 respectively, after the set of stellar gaming figures were released by the Gaming Inspection and Coordination Bureau (DICJ).

We continue to recommend exposure to operators with strong Cotai mass market presence given the growth outperformance of the segment, driven by an increase in gaming penetration and as the mass market segment matures.

At the same time we take a cautious position over China’s new administration’s stance on corruption, as such, we have a SELL rating on VIP focused Wynn (1128) TP HKD18.30.