Morgan Stanley predicts that Macau's gambling revenue in April will increase by 2% to 18.9 billion Macau Patacas.

Morgan Stanley released a research report stating that the total gambling revenue in Macau in March was 19.7 billion Macau dollars, an increase of 0.8% year-on-year, in line with the bank's expectations, but lower than the forecasts of American analysts. In the first quarter alone, Macau gambling revenue increased by 0.6% year-on-year, reaching 76% of the 2019 first quarter level, which may lead to a 4% year-on-year decline in industry EBITDA. In addition, the bank expects gambling revenue in April to increase by 2% to 18.9 billion Macau dollars. The bank believes that Macau gambling stocks have recently underperformed the market, falling by 20% since the beginning of the year, compared to a 15% increase in the Hang Seng Index, indicating the weakness has been reflected. However, the forecasted 4% to 5% year-on-year growth for the whole year is facing risks, and EBITDA forecasts are also at risk. On the positive side, the enterprise value/EBITDA multiple of the Macau gambling industry is about 8 times, compared to the 12 times average level in 2015, which seems relatively attractive. Even after deducting non-gaming capital expenditures, the free cash flow yield is about 8%, with many companies like MGM China (02282), Wynn Macau (01128), and Galaxy Ent (00027) now using about 50% of their profits for dividend distribution (dividend yield of about 4% to 5%).