Deutsche Bank analysts have forecast a positive year for Macao’s casinos, despite tense relations between China and the US that could impact investor sentiment, Asia Gaming Brief reports. However, the bank’s Carlo Santarelli and Steven Pizzella also forecast gross gaming revenue (GGR) growth of just 5.3 percent for 2025 – below the consensus estimate of 7.4 percent.
The analysts’ report compared US President-elect Donald Trump’s impending tariff hikes on certain Chinese exports with the China-US trade war that began in 2018.
While the earlier spat led to a tough year for Macao gaming stocks, Santarelli and Pizzella argue that this time around is different, because the decline of the VIP gambling market means Trump’s policies are not “a rational concern.”
[See more: Macao registers annual gross gaming revenue of 226.8 billion patacas]
Santarelli and Pizzella said that the SAR’s long-term fundamentals remained attractive thanks to steadily recovering visitor numbers and the mass market’s expansion, though they questioned “whether GGR will drive stock performance in 2025”.
The analysts described Macao’s 2024 performance as middling; a mix of recovery and underperformance. While GGR grew by 23.9 percent year-on-year (2023 was a low base level due to the Covid-19 pandemic), it remained well short of pre-pandemic levels.
The SAR’s gaming stocks also underperformed in 2024, something Deutsche Bank attributed to eroded profit margins caused by heightened competition in the mass market and geopolitical uncertainties impacting sentiment toward US-listed operators in Macao.
