The Truth About The 'Slowdown' In Macau

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As investors have begun to freak out about China, shares in gaming companies exposed to Macau have collapsed.The truth: Everything’s just fine.

Due to the volatility in stocks like Las Vegas Sands and MGM China, and since the first 9 days of October were “golden week,” Nomura has sent out an update to Macau gaming revenues.

Bottom line: There’s no slowdown.

We expect the remainder of October to return to normal levels and estimate the full month of October could achieve ~MOP26B (vs. last record in August of MOP24.7B), which implies ~40% YOY growth. As we had written previously, Q4’11 growth rate should slow due to tougher YOY comparisons. See Fig 1 below for market share data.

Underlying VIP volume did not show any signs of slowdown. Collection cycle will be the next focus and our research indicates there has not been any lengthening of receivable turnover. Oct Golden Week visitors from China up 22% to 580k.

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