Melco Resorts (NASDAQ:MLCO) reported a strong set of results for 2Q19 which included a record quarterly EBITDA of $442m or up 24% yoy. Instead, as I turned neutral at the end of July due to the uncertainty caused by the protests in Hong Kong, share price has since corrected more than 12%. But, recent reports, which claimed that a certain junket had facilitated proxy betting by customers at bricks and mortar casinos in the Philippines and Cambodia, may have encouraged players to move back to Macau. Also, recent channel checks have indicated that the protests in Hong Kong had little material effect on Macau play.
Comment from Nomura
Here's what Nomura analysts had to say about August:
“Positive surprises” in last week’s Macau casino market performance included that in the mass gaming segment, “the protests in Hong Kong do not appear to be having an impact on the weekly GGR [gross gaming revenue] numbers”, and in VIP, “volumes are recovering after junkets ended proxy betting… as a marketing tool overseas last month”
One of the biggest concerns with investors is that Macau was losing VIP share to Southeast Asian countries. I believe in the near term, junkets will now be cautious trying to lure Chinese players there and instead focus on the Macau market.
Resilient to the protests in Hong Kong
Despite my previous research indicating that up to a third of Macau's visitors could go through Hong Kong and that the fall in retail sales in Hong Kong may correlate with weakness in Macau gaming operations, recent checks do point to the opposite that Macau gaming is relatively unaffected.
Sanford Bernstein noted that the protests in neighboring Hong Kong had been “immaterial” to the Macau casino market’s performance.
The official August GGR released in about a week will be
