MACAU BUSINESS In just two months, this illness, which could be transmitted
via person-to-person transmission, has quickly spread across the nation and the globe. As of 4th February, there were over 24,530 cases of the novel coronavirus in all provinces in China, claiming over 490 lives, according to the Chinese authorities, while Taiwan and Hong Kong have recorded 10 and 18 cases respectively. Albeit a lower mortality rate, the number of Wuhan Coronavirus infections in the Greater China region has far exceeded the number of SARS cases in the 2002-2003 period, when there were 5,320 cases, 1,750 cases, and one case respectively in Mainland China, Hong Kong, and Macau. Beyond the Greater China region, 24 countries have also reported the infections, including the United States, Australia, Singapore, South Korea, Japan, Malaysia, France, Canada, Vietnam, the Philippines, Thailand, and others.
MOP12 billion revenue loss
while other industries will only contribute to a minimal income [for the government],” he noted. “We will also launch different tax relief programmes to support the city in this difficult period, so we will definitely have a budget deficit this year.” It’s the second time all the casinos in Macau have come to a halt since the 33-hour shutdown amid the lashing of Typhoon Mangkhut in 2018. The gaming industry makes up about half of the territory’s gross domestic product (GDP), and about 80 per cent of the government revenue. “Our robust fiscal reserve comes into play now to support
the city in this difficult period,” Mr. Ho, who was wearing a facial mask, told the press. “Macau can still bear these economic losses,” he added, who does not rule out to extend the closure period should the epidemic continue to escalate.
More infections
This decision came as the city has reported 10 cases of the novel coronavirus as of February 4, including a 29-year-old employee at Galaxy Macau, the flagship integrated resort operated by gaming operator Galaxy Entertainment Group Ltd, and a 59-year-old coach driver of another operator SJM Holdings Ltd. The first cases of this new coronavirus were first reported in December in Wuhan, a major transportation hub in the central part of the mainland with a population of 11 million.
Hayman Chiu, research director of brokerage Cinda International Research Limited, expects the gaming industry will lose at least MOP12 billion in the 15-day closedown, based on the calculations of the daily average of about MOP800-850 million in the January-February period of 2018 and 2019. “The casinos basically had no guests, and the gaming
revenue has gone downhill in the Chinese New Year period before the closedown,” said Mr. Chiu, who has visited the gambling enclave during the CNY period, which fell on end-January, one of the traditional peak seasons for the gaming industry when tens of thousands of Mainland Chinese flocked to the territory. According to government figures, the 2019 Macau gaming
revenue totalled MOP292.46 billion, down by 3.4 per cent from the previous year and is the worst performance since 2015, amid the on-going trade war between China and the United States, the slowing mainland economy and months of protests in nearby Hong Kong. The latest monthly data show the gaming industry raked in MOP22.13 billion in January this year, plunging 11.3 per cent year-on-year, which, however, was yet to show the full impact of the epidemic. Mr. Chiu agrees that the shutdown will help contain the
outbreak more effectively so that the industry will be in a better position for recovery at the end of this epidemic. “But the outlook will worsen should this epidemic continue to deteriorate and the closedown period be extended,” the brokerage research director added.
Grim 1H
Brokerage JP Morgan said in a research note after the casino shutdown: “February GGR [gross gaming revenue] is expected to drop roughly 75 per cent to US$700 million (vs US$2.8 billion originally), which in turn would reduce our annual GGR by -6 percent.” The brokerage added the local gaming industry is set to incur a US$300 million EBITDA loss in February, around US$1 billion less than the original February forecast of a US$700 million gain before the virus outbreak. Despite the 15-day shutdown, all six gaming operators agree with the government that it would continue to pay the casino workers, equivalent to about 40,000 in total across the sector. “Assuming only a two-week shutdown followed by some soft
business resuming in late February and March, [the first quarter] could show GGR [gross gaming revenue] y/y decline of 50 percent,” said brokerage Sanford C. Bernstein in a research note.
22 MARCH 2020
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94
