Melco: Gaming Concessionaires in Macau Face Heightened Competition After Pandemic; Ongoing Pressure on Profit Margins
Competition Impact: Melco Resorts & Entertainment's CEO Lawrence Ho noted that intensified competition among Macau's gaming concessionaires has hindered margin improvements, despite expectations of gains following the decline of junket operations.
Market Dynamics: While competition has stabilized, it remains intense, with operators aggressively vying for market share, which has prevented the anticipated margin upsurge in the industry.
Collaborative Potential: Ho suggested that if all six concessionaires worked together effectively in the growing market, margins could improve, although the peak competition intensity has passed.
Strategic Focus: Melco's President Evan Winkler emphasized that the company will not be influenced by competitors' aggressive strategies and will continue to reinvest based on specific projects and player segments.
Trade with 70% Backtested Accuracy
Analyst Views on 00200
No data
About the author
Melco Cancels Sale of City of Dreams Manila Development
Melco's Decision on City of Dreams Manila: Melco has decided to abandon the sale of the City of Dreams Manila project, as no buyer was found that met the property's value expectations.
Lawrence Ho's Remarks: Lawrence Ho, Chairman and CEO of Melco, stated that while the sale process has concluded, he remains optimistic about the business's recovery and indicated that the situation may be reevaluated in the future.
SANDS CHINA LTD Rises Over 4% Despite Market Trends, Following Strong January GGR from MO
Macau's GGR Performance: Macau's January Gross Gaming Revenue (GGR) reached MOP22.633 billion, reflecting a 24% year-over-year increase and surpassing market expectations by about 5%.
Stock Market Reactions: Major gaming companies like Sands China and Galaxy Entertainment saw their stock prices rise, with Sands China up 4.58% and Galaxy Entertainment up 0.95%, despite initial declines.
Market Forecasts: Analysts from Morgan Stanley and CLSA predict continued growth in Macau's GGR, with expectations of an 18% year-over-year increase in the first quarter and potential upside risks to annual growth forecasts.
Short Selling Data: The report includes short selling statistics for various companies, indicating varying levels of market confidence, with SJM Holdings showing a notably high short selling ratio of 29.649%.
JPM Predicts Slower 4Q Earnings Growth for MO Casinos Compared to GGR, Lowers Ratings for SJM Holdings and Melco Resorts & Entertainment
JPMorgan's Optimism on Macau Gaming: JPMorgan expressed optimism about Macau's gaming industry, predicting an 'upcycle' driven by high-end demand and market liquidity, with GGR exceeding expectations but profit margins lagging behind.
Downgrades and Selective Strategy: The firm downgraded SJM Holdings from Neutral to Underweight and Melco Resorts from Overweight to Neutral, while maintaining Galaxy Entertainment as a top pick and advising caution on SJM Holdings and Melco International Development.
Profit Margin Concerns: Despite strong GGR growth, profit margins have not improved, attributed to higher operating expenses and a shift towards VIP gaming, with expectations of continued challenges in Q4 2025.
Market Sentiment and Short Selling: The report highlighted significant short selling activity in various stocks, indicating market skepticism, particularly towards SJM Holdings and Melco International Development.
CICC Projects January GGR for MO Between MOP20.2B and MOP21.7B, Anticipating 10-19% Year-on-Year Growth in Average Daily GGR
Macau's GGR Performance: Macau's Gross Gaming Revenue (GGR) grew by 14.8% year-on-year to MOP20.9 billion in December 2025, recovering to 91.5% of December 2019 levels, although it fell short of the 18% growth expected by Bloomberg.
January 2026 Projections: CICC estimates that Macau's GGR will be between MOP20.2-21.7 billion in January 2026, indicating a daily average of MOP650-700 million, which represents a year-on-year increase of 10-19%, but remains 13-19% lower than January 2019 figures.
Stock Performance and Short Selling: The report highlights the stock performance of major gaming companies, with MGM CHINA, SANDS CHINA, and GALAXY ENT experiencing notable short selling activity, indicating market caution.
Licensing Fee Impact: Jefferies warns that a potential licensing fee hike for MGM CHINA could lead to a 10% drop in net profit for 2026, along with a possible review of dividend policies.
HSI Rises 116 Points at Midday as BIDU-SW Jumps Nearly 7%; POP MART Declines 5%
Market Performance: Hong Kong stock futures rose, with the HSI increasing by 0.45% to 25,751, and total half-day turnover reaching $96.537 billion.
IPO Activity: ILUVATAR COREX launched its IPO aiming to raise approximately $3.677 billion, while robotics company DOBOT proposed an IPO on the Shenzhen Stock Exchange.
Stock Movements: BIDU-SW surged 6.9% amid excitement over its Kunlun chip concept, while SMIC gained 3.2% after acquiring a stake in SMNC.
Declines in Other Stocks: POP MART's stock fell 5.2% due to a drop in second-hand blind box prices, and casino stocks like MELCO INT'L DEV and MGM CHINA experienced declines of 3.5% and 3.7%, respectively.
HSI Closes 183 Points Lower; Auto Stocks Surge; SANDS CHINA LTD Drops Over 4%
Market Performance: The HSI closed at 25,635, down 183 points (0.7%), with the HSCEI and HSTECH also experiencing declines. Total market turnover was HK$224.508 billion.
Fiscal Policy Update: China's Ministry of Finance plans to maintain a proactive fiscal policy next year, focusing on increased spending and support for the trade-in of old consumer goods.
Automotive Sector Gains: Notable gains were seen in the automotive sector, with companies like GEELY AUTO, LI AUTO-W, and NIO-SW reporting increases in stock prices, while BYD COMPANY emerged as the best-performing blue chip.
Gaming Sector Decline: MGM CHINA's stock plummeted over 17% following a downgrade by Morgan Stanley, impacting other gaming stocks like SANDS CHINA and WYNN MACAU, which also faced losses.
Melco Cancels Sale of City of Dreams Manila Development
Melco's Decision on City of Dreams Manila: Melco has decided to abandon the sale of the City of Dreams Manila project, as no buyer was found that met the property's value expectations.
Lawrence Ho's Remarks: Lawrence Ho, Chairman and CEO of Melco, stated that while the sale process has concluded, he remains optimistic about the business's recovery and indicated that the situation may be reevaluated in the future.
SANDS CHINA LTD Rises Over 4% Despite Market Trends, Following Strong January GGR from MO
Macau's GGR Performance: Macau's January Gross Gaming Revenue (GGR) reached MOP22.633 billion, reflecting a 24% year-over-year increase and surpassing market expectations by about 5%.
Stock Market Reactions: Major gaming companies like Sands China and Galaxy Entertainment saw their stock prices rise, with Sands China up 4.58% and Galaxy Entertainment up 0.95%, despite initial declines.
Market Forecasts: Analysts from Morgan Stanley and CLSA predict continued growth in Macau's GGR, with expectations of an 18% year-over-year increase in the first quarter and potential upside risks to annual growth forecasts.
Short Selling Data: The report includes short selling statistics for various companies, indicating varying levels of market confidence, with SJM Holdings showing a notably high short selling ratio of 29.649%.
JPM Predicts Slower 4Q Earnings Growth for MO Casinos Compared to GGR, Lowers Ratings for SJM Holdings and Melco Resorts & Entertainment
JPMorgan's Optimism on Macau Gaming: JPMorgan expressed optimism about Macau's gaming industry, predicting an 'upcycle' driven by high-end demand and market liquidity, with GGR exceeding expectations but profit margins lagging behind.
Downgrades and Selective Strategy: The firm downgraded SJM Holdings from Neutral to Underweight and Melco Resorts from Overweight to Neutral, while maintaining Galaxy Entertainment as a top pick and advising caution on SJM Holdings and Melco International Development.
Profit Margin Concerns: Despite strong GGR growth, profit margins have not improved, attributed to higher operating expenses and a shift towards VIP gaming, with expectations of continued challenges in Q4 2025.
Market Sentiment and Short Selling: The report highlighted significant short selling activity in various stocks, indicating market skepticism, particularly towards SJM Holdings and Melco International Development.
CICC Projects January GGR for MO Between MOP20.2B and MOP21.7B, Anticipating 10-19% Year-on-Year Growth in Average Daily GGR
Macau's GGR Performance: Macau's Gross Gaming Revenue (GGR) grew by 14.8% year-on-year to MOP20.9 billion in December 2025, recovering to 91.5% of December 2019 levels, although it fell short of the 18% growth expected by Bloomberg.
January 2026 Projections: CICC estimates that Macau's GGR will be between MOP20.2-21.7 billion in January 2026, indicating a daily average of MOP650-700 million, which represents a year-on-year increase of 10-19%, but remains 13-19% lower than January 2019 figures.
Stock Performance and Short Selling: The report highlights the stock performance of major gaming companies, with MGM CHINA, SANDS CHINA, and GALAXY ENT experiencing notable short selling activity, indicating market caution.
Licensing Fee Impact: Jefferies warns that a potential licensing fee hike for MGM CHINA could lead to a 10% drop in net profit for 2026, along with a possible review of dividend policies.
HSI Rises 116 Points at Midday as BIDU-SW Jumps Nearly 7%; POP MART Declines 5%
Market Performance: Hong Kong stock futures rose, with the HSI increasing by 0.45% to 25,751, and total half-day turnover reaching $96.537 billion.
IPO Activity: ILUVATAR COREX launched its IPO aiming to raise approximately $3.677 billion, while robotics company DOBOT proposed an IPO on the Shenzhen Stock Exchange.
Stock Movements: BIDU-SW surged 6.9% amid excitement over its Kunlun chip concept, while SMIC gained 3.2% after acquiring a stake in SMNC.
Declines in Other Stocks: POP MART's stock fell 5.2% due to a drop in second-hand blind box prices, and casino stocks like MELCO INT'L DEV and MGM CHINA experienced declines of 3.5% and 3.7%, respectively.
HSI Closes 183 Points Lower; Auto Stocks Surge; SANDS CHINA LTD Drops Over 4%
Market Performance: The HSI closed at 25,635, down 183 points (0.7%), with the HSCEI and HSTECH also experiencing declines. Total market turnover was HK$224.508 billion.
Fiscal Policy Update: China's Ministry of Finance plans to maintain a proactive fiscal policy next year, focusing on increased spending and support for the trade-in of old consumer goods.
Automotive Sector Gains: Notable gains were seen in the automotive sector, with companies like GEELY AUTO, LI AUTO-W, and NIO-SW reporting increases in stock prices, while BYD COMPANY emerged as the best-performing blue chip.
Gaming Sector Decline: MGM CHINA's stock plummeted over 17% following a downgrade by Morgan Stanley, impacting other gaming stocks like SANDS CHINA and WYNN MACAU, which also faced losses.
