Made in China-Macau:Summer rally;ICBC:reverse roadshow takeaways;Yili;HKEX;DSF

Recent conversations with industry contacts confirmed our view that Macau is entering its 2nd phase of VIP resurgence (June 1 report) where mid-sized junkets are outgrowing Big 3 junkets given the former’s more aggressive credit extension. As such, VIP GGR growth is accelerating and outgrowing mass GGR. Within mass, premium mass is also outgrowing grind mass. Indeed, GGR accelerated to MOP750m/day last week, up from MOP735m/day in May, even during the seasonal slow month of June. As such, we lift our June GGR forecast from 28% yoy to 30-32% yoy. Correspondingly, we are lifting 2017 GGR growth from 15% to 18% and 2018 GGR growth from 10% to 14%. We lift 2017-18F EBITDA by 1-10%. Key beneficiaries are stocks with high VIP exposures (Wynn, Galaxy & SJM). We thus lift TPs for these 3 stocks by 10-13%. Our top pick is now Wynn given its ability to lift dividends in FY17-19F.