According to a December 2 investor note from Jefferies Equity Research, gambling revenues from casinos in Macau “moderately outperformed forecasts.” Numbers from December were expected to be “strong,” fulfilling projections by the Macanese government.

“Looking ahead, recently announced [Chinese] stimulus and changes to both monetary and immigration policy should provide potential catalysts for growth in the region in FY25,” wrote lead analyst David Katz. “However, given limited visibility into the region and early stages, our expectations remain unchanged.”

In November, gambling winnings grew by 14.9 percent annually, reaching $2.3 billion, a decimal point above the high end of Wall Street expectations for the market. Katz predicted a “new normal” that doesn’t achieve pre-COVID altitudes, but reflects diminished high-roller play and stronger mass-market action.

Not only was the Macau government pleasantly surprised, so was Wall Street. The November numbers exceeded the consensus projection by 1.7 percent and Jefferies’s forecasts by 7.1 percent.

Jefferies researchers found Macanese casinos to be solid performers, with outcomes reflecting “potentially better-than-expected hold rates.” Therefore, Katz anticipated that Macau could close out 2024 with as much as $28.5 billion in aggregate gambling revenue.

To hit that mark would require casinos to earn $2.4 billion this month. That would outstrip Jefferies’s $2.3 billion projection and come in just $40 million short of Wall Street predictions.

Further cause for Katz optimism is a new local-area visa policy that takes effect January 1. Residents of neighboring Zhuhai will be able to apply for one-visit-per-week status, while those in adjacent Hengqin will be eligible for multiple-entry visas that permit week-long sojourns to Macau.

“We believe both gaming and non-gaming revenues in Macau will benefit, as more tourists travel to the region, improving the base mass segment, while potentially recruiting more premium-mass players in the future,” explained Katz. He also believed that, were hotels in Macau to become maxed out in terms of capacity, the government would look kindly on additional hotel development in Hengqin.

Katz wrapped up by noting that China’s recent economic-stimulus measures had initially caused positive investor sentiment. “However,” he warned, U.S.-facing stocks “could now continue to face a valuation headwind from the outcome of the U.S. election and its expected impact on U.S.-China relations, potentially remaining in the current range, pending other events.”

Katz appeared to be alluding to tariff threats from the incoming Trump administration. A minimum of 25 percent has been floated, sparking fears of an escalated U.S./China trade war.

Among Hong Kong-traded names, Katz liked Galaxy Entertainment best, citing its “high-end infrastructure, which lends itself to market-share increases in the future.” As for Wall Street-based stocks, he gave the nod to Las Vegas Sands, on the strength of 2024 room upgrades (particularly at The Londoner complex), buttressed by the market position of Marina Bay Sands in Singapore. He deemed the latter “stronger … which could be a positive setup for 2025.”