Jefferies equity analyst Rong Li has a great new note out about the risk of a serious slowdown in the Macau gaming market.
Macau is highly levered (obviously) to China, and in particular the Chinese elites.
The note has two charts that we love.
The first shows mainland art auction values vs. year-over-year growth in Macau VIP gambling revenue.
As you can see, there’s been a massive decline lately in the growth rate of Chinese mainland art auction totals, and that’s corresponded with a decline in Macau growth.
It’s pretty startline that the YOY change in mainland art auction value has actually gone negative.
The next chart is also pretty cool. It shows the number and growth rate of helicopter flights between Macau and the mainland/Hong Kong.
The decline is big.
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