Wynn Macau Gains After Casino Revenue Beats Estimates

Casino operators in Macau gained in Hong Kong trading and monthly revenue beat analyst estimates as middle-income visitors rose in the world’s biggest gambling hub.

SJM Holdings Ltd. rose as much as 3.5 percent to HK$22.25, while Sands China Ltd. and Wynn Macau Ltd. climbed as much as 4 percent and 5.1 percent, respectively, as of 3:10 p.m. in Hong Kong. Galaxy Entertainment Group Ltd. gained as much as 3 percent. The Hang Seng Index advanced as much as 0.8 percent.

Gaming revenue from the six casino operators in Macau, the only place in China where casinos are legal, rose 11 percent to

31.3 billion patacas ($3.92 billion) in April, Macau’s Gaming Inspection and Coordination Bureau said today. The increase compares with the 7 percent median estimate of five analysts surveyed by Bloomberg News.

“As noted by all of the management teams that have reported first-quarter results so far, the VIP segment appears to remain healthy, while mass remains exceptionally strong,” Grant Govertsen, a Macau-based analyst at Union Gaming Group LLC, wrote in a note. “We remain biased to the upside, especially in the context of a mass-market segment that is inflecting higher than our initial assumptions.”

MGM China Holdings Ltd. gained as much as 4.1 percent, while Melco Crown Entertainment Ltd. climbed as much as 1.8 percent.

Wynn Macau and MGM China first-quarter rose on higher revenue from mass-market customers, the companies reported this week. Wynn Macau reported adjusted property earnings before interest, taxes, depreciation and amortization rose 16 percent to $384.3 million. Earnings at MGM China jumped by a third to $257 million.

Improved infrastucture and rail connections are boosting tourism from mainland China to the former Portuguese enclave. Sands China and Galaxy Entertainment have been adding shops, hotel rooms and entertainment to draw more holiday-makers to their resorts.

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