The Macau Gaming Inspection and Coordination Bureau reported on June 2the monthly win for the SAR’s casinos during May 2011.. As the table below shows, thanks both to a successful Golden Week and to the opening of new venues, the take was a record $24.3 billion patacas, almost 20% ahead of the previous record posted just the month before, in April.
|Monthly Gross Revenue from Games of Fortune in 2011 and 2010 MOP millions|
|Monthly Gross Revenue||Accumulated Gross Revenue|
|Source: Macau Gaming Inspection and Coordination Bureau|
The biggest winner during the month appears to have been Galaxy Entertainment, which opened a giant new casino, the Galaxy Macau in Cotai, around mid-May. The largest market share loser seems to have been Wynn Macau.
Reaction by Hong Kong investors to the May record has, so far, been muted. Several reasons why:
–There have already been a series of months of 40%+ year on year gains in casino win recently; the fourth no longer carries the same positive surprise value that the first did.
–MGM is meeting with investors as part of its IPO process, and other publicly traded Macau casino companies have been presenting at investor conferences. So the news of a strong Golden Week and the expansion of the market due to the Galaxy Macau has already been disseminated.
–I think we’re reaching, at around 20x current year results, the limits of the price-earnings multiple expansion that the Hong Kong market is willing to permit for Macau casino stocks. Unless/until the market changes its mind, it seems to me that no stock will trade at more than 20x, no matter what current profit growth may be. If so, the stocks will either tread water, or move simply in line with the market, until investors begin to discount 2012 prospects.