Macau Gaming:April’s blues chased away by a strong May

May surprised on the upside, addressing market uncertainty: DICJ announced thatMay harvested MOP22.7bn in gross gaming revenue (GGR), translating into an averagedaily run rate (ADR) of MOP734m/day vs MOP672m/day in April. GGR growthaccelerated to 13% m-o-m or 24% y-o-y. VIP and mass picked up meaningfully vs Aprilespecially into the final 10 days of May, yielding MOP804m/day collectively. Based on ourestimates VIP is up 32% yoy and mass is up 17% yoy. VIP was boosted by favourableluck especially into 2H of the month. Mass revenue was strong, helped in part by theDragon boat holiday as evidenced in the strong traffic. The strong May figure gave themarket confidence that fundamentals are intact and that recovery is not disrupted asinvestors may have thought after seeing a weaker April number.

    2Q17 tracks north of +20% y-o-y, momentum is strong: June was the weakestmonth in 2016, as the business was impacted by the phone betting ban implementedin May 2016 and the Euro Cup, which spanned the month of June and July last year.

    Therefore, assuming daily run rate comes in at around MOP650m/day, June y-o-ygrowth could hit 23% y-o-y. Factoring in better than expected May gaming revenue,2Q17 is tracking above 20%y-o-y growth and roughly flat q-o-q. Quarter to date, VIPgrowth is tracking roughly +25% y-o-y and mass +16% y-o-y based on our estimates.

    The 3Q17 y-o-y comp remains relatively easy