HK Stock Market Move | Gaming stocks collectively declined; Macau gaming revenue in September fell short of market expectations; CLSA believes there is limited room for industry margin expansion.

Gaming stocks collectively declined. As of press time, MELCO INT'L DEV (00200) fell 3.85% to HK$2.62; WYNN MACAU (01128) dropped 3.12% to HK$4.955; Sands China (01928) declined 2.62% to HK$11.16; GALAXY ENT (00027) fell 2.43% to HK$31.34. On the news front, a HAITONG INT'L research report pointed out that Macau's DICJ announced September gross gaming revenue fell 1.2% year-on-year, below the market consensus estimate of a 2.2% year-on-year increase, and down 17.5% month-on-month, recovering to 81.8% of the same period in 2019. The year-on-year decline in September was basically flat with August (down 1.2%), marking the fourth consecutive month of year-on-year decline; the sharp month-on-month drop was mainly due to the end of the summer peak season, with some travelers postponing their trips to the National Day Golden Week. CLSA maintains a neutral view on the industry for the next six months, believing that with only slight gaming revenue growth, there is limited room for margin expansion. Goldman Sachs believes that third-quarter gaming revenue remained soft, mainly due to the diversion of gaming consumption during the World Cup; international airfare prices rose 30% to 40% year-on-year and only began to normalize in August to September; and negative sentiment brought about by the stock market correction, China's strengthened capital controls, and tax regulation on offshore financial investments.