Morgan Stanley: Macau growth rates to hit 15% again


Morgan Stanley thinks revenue growth rates in Macau will pick back up after going through a short cooling off period.

By 2016, MS sees growth moving back up past 15% as the mass market segment continues to funnel traffic to the peninsula.

Macau-related stocks: MPEL, MGM, WYNN, LVS, GXYEF, SJMHF.

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Comments (6)
  • Howard Jay Klein
    , contributor
    Comments (712) | Send Message
     
    Morgan Stanley is a tad on the bullish side looking for 15% in '16 and beyond. My own analysis of Macau is that an 11.5% to 13% range will be closer to the mark,perhaps even a bit less. But conceptually I believe MS is on target looking for double digit growth and agree with their underlying assumption that what we have at present is a blip not a trend. Having said that, let me say why I am slightly less
    bullish:
    1. Expansion of capacity on the Cotai property will have a bit of dilutivel impact.
    2. The Chinese housing bubble which is beginning a slow deflation now will accelerate in the '15 to '17 out years primarily because I also have every expectation of a softening of the world economy in those years.
    3. Look for a spike in US interest rates around that time which will nudge rates up all over the world as a reinflationary pattern emerges. China will slow on that basis.
    4. China's manufacturing/service base which accounts for so much of the engine that generates mass play in Macau will likewise slow a bit, according to savvy Chinese players of my acquaintance who employ lots of bodies on the mainland.
    But none of this can stop what is essentially unstoppable, namely the base reality that for the foreseeable seven out years, Macau will be serving a still underserved market base. Even if VIP begins to flag there will be so much mass to take its place
    that in the end the performance will be there.
    19 Jun 2014, 03:48 PM Reply Like
  • jensan96
    , contributor
    Comments (299) | Send Message
     
    Mass can be serviced by 3 star hotels on Hengquin , in 2016 when Zhuhai bridge to Macau opens watch a great many conventions placed at the IR and that increase weekday hotel occupancy and push Revcom higher. Ancillary revenues move higher with these conventions. There are huge conventions that occur in HK which will be found at Venetian/Parisian Hotels with SCC servicing second tier conventions.
    China macro economic state is maturing from agricultural,to textile to electronics and other areas of industrial participation, so that a middle class is being intensely developed. 7% growth of a country of 1.2 billion versus 3% of 330 million the ramifications of expansion are immense.
    19 Jun 2014, 06:09 PM Reply Like
  • Coltgunsil
    , contributor
    Comments (87) | Send Message
     
    Morgan Stanley is the same company that opined earlier this week that Mpel's mass market segment would be hurt by the opening of their Philippine casino later this summer....I guess they expected the low end gamblers in southern China to drive to Manila????

     

    Meanwhile their earlier article completely ignored the upcoming Opening of Mpel's City of Dreams on Cotai.

     

    News flash: a new casino on Cotai and a new Casino in Manila is a game changer for MPEL and deserves a little attention folks.

     

    But, these analysts are in the pocket of the short sellers. And I know the odds on six and eight.
    19 Jun 2014, 06:41 PM Reply Like
  • Coltgunsil
    , contributor
    Comments (87) | Send Message
     
    regarding above...Studio City is about to open on Cotai. City of Dreams is already open and doing great....and Disney is involved with MPEL in Manila
    19 Jun 2014, 07:09 PM Reply Like
  • Cybercash28
    , contributor
    Comments (13) | Send Message
     
    Things changes so quickly in china. I know business people there and used to know a young college man who is the son of the top 10 richest families in Bejiing.

     

    Gambling there is like sport here. Can we live without sports?

     

    China is moving from an industrial economy to a consumer industry. The spend money when they have them, especially gambling. China will become the number one economic global leader. They will have a lot of money to spend. China is also extremely competitive, we shouldn't underestimate the growth there. Compare our growth and their growth. We can only dream of 7% or even 5%

     

    To me, invest in China, the Internet and E-commerce sectors...BIDU QIHU VIPS JD JMEI YY WBAI. Alibaba...etc... MPEL WYNN LVS...etc
    19 Jun 2014, 08:28 PM Reply Like
  • Cybercash28
    , contributor
    Comments (13) | Send Message
     
    I used to hold a high level management position in a multi billion global company. Invested In a number of businesses. Decided to stay home and began learning the market for about 15 years. Was named as business person of the year where I live.

     

    Focus both on FA and TA.
    19 Jun 2014, 08:28 PM Reply Like
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