The Zhitong Finance App learned that CICC released a research report saying that it is still cautious about the fundamentals of the gaming industry in Macau, China, downgraded the industry rating, and lowered the industry's profit forecast for 2026 and 2027. The bank has yet to see a clear inflection point in the short term in terms of total revenue and profit levels. The bank believes that without substantial new supply, policy adjustments, or other demand-side catalysts, the recovery of the industry may be further delayed.
CICC's main views are as follows:
The bank believes that the market's consensus expectations do not fully reflect the impact of weak demand. After lowering the profit forecast this time, the bank expects the industry EBITDA to decline by 5% and 9% year-on-year in 2026 and 2027. However, Visible Alpha consistently expects the industry to maintain positive year-on-year growth (EBITDA is expected to grow 0% and 7% year-on-year in 2026 and 2027). The bank believes that the market has underestimated the extent of demand-side weakness, and they agree that there is still room for downward revision.
Due to repetitive content and competition from Kai Tak, the appeal of Macau events declined. The bank believes that the appeal of Macau's entertainment arrangements to incremental visitors has declined because: 1) entertainment content has been repeated in the past four years; 2) competition from Hong Kong's Kai Tak venues has intensified. 50,000 venues can host more heavyweight international events, or will divert Macau's high-end entertainment resources, leading to a decline in the attractiveness of Macau's entertainment activities to passenger traffic.
High-end demand weakened, and the recovery was driven by same-day round-trip customers with low spending capacity, and overseas visitor growth peaked. During the 11th Golden Week in 2026, the number of visitors to Australia increased 9% year on year, but the bank expected a 5% year-on-year drop in comparable total earnings, indicating weak per capita spending capacity. Meanwhile, due to the downturn in global stock markets, overseas visitors have also gradually peaked since May 2026. As a result, the previous double-digit growth rate turned into a single-digit decline.
The company expects the opening of Galaxy Phase IV to be postponed until early 2028, and the industry lacks growth highlights in 2027. Galaxy Phase IV opened later than planned, causing the industry to lack a key catalyst in 2027 and limited drivers that can stimulate industry demand in the short term.
The bank expects the industry's valuation repair cycle to take longer than expected, as this requires evidence that the increase in demand is not due to ordinary seasonal fluctuations or exchange rate changes.
Risk Alerts
Gaming demand and liquidity are recovering faster than expected; new properties are opening sooner than expected, and refurbished properties are climbing faster than expected.