Gaming Sector Outlook: Recovery in 2016 but with numerous threats

January 15, 2016

  • Industry GGR expected to grow 17.5% 2016 (vs 21.5% 2015) from foreign and local demand. Foreign arrivals est to grow 15%. Domestic consumer spending up 6.1% 9M2015 and will continue to grow.
  • No new casino openings so demand growth of 17.6% will improve industry earnings.
  • Industry consolidated net loss of P3B in 2015 should show net profit of P4.2B for 2016. BLOOM provisioned P1.7B in bad debts (9M2015) bec of credit extensions. MCP one-time expenses in 2015.
  • Cheap valuation: local gaming stocks trade at 8.1x 2016EV/EBITDA vs Macau 10X. Macau’s historical average is 12.8X. But any rally not sustainable bec of China’s continued crackdown on corruption. Macau’s 2015 GGR down 34%.
  • Longer term: 2017 Manila Bay


Source: COL Financial

Category: In The News