Broker: UOB Kay Hian (Hong Kong) Limited
Date of Report: 2 June 2025
China’s Economic Stabilization and Macau Gaming Surge: Key Market Insights and Stock Analysis
Key Highlights at a Glance
- China’s May PMI: Signs of stabilization with uneven recovery, requiring further targeted economic measures.
- Macau Gaming: May GGR outpaces expectations, reaching strongest levels since reopening with Galaxy as the top pick.
- Index Outlook: HSI and TECH Index enter consolidation, with short-term resistance and potential corrections ahead.
Economic Calendar: Upcoming Catalysts
Key upcoming macro events for China and Hong Kong include trade balances, money supply, inflation, unemployment rates, and production data throughout June. These events will help shape the near-term outlook for the region’s equities, currencies, and sector performance.
| Date |
Country/Region |
Indicator/Event |
| 02 Jun |
Hong Kong |
Apr Retail Sales |
| 03 Jun |
China |
May Caixin China PMI Mfg |
| 04 Jun |
Hong Kong |
May S&P Global Hong Kong PMI |
| 05 Jun |
China |
May Caixin China PMI Composite, Services |
| 06 Jun |
Hong Kong |
May Foreign Reserves |
| 07 Jun |
China |
May Foreign Reserves |
| 09 Jun |
China |
May Trade Balance, Exports, Imports |
| 09 Jun |
China |
May Inflation (PPI, CPI) |
| 16 Jun |
China |
May Industrial Production, Retail Sales, Fixed Assets (Ex Rural), Surveyed Jobless Rate |
| 17 Jun |
Hong Kong |
May Unemployment Rate SA |
| 20 Jun |
Hong Kong |
1Q BoP, May CPI Composite |
| 27 Jun |
China |
May Industrial Profits, 1Q F BoP Current Account |
| 30 Jun |
China |
Jun NBS PMI (composite, manufacturing, non-manufacturing) |
| 30 Jun |
Hong Kong |
May Money Supply (M1, M2, M3) |
Global Market Performance and Key Indices
Major indices showed mixed performance with Hang Seng Index (HSI) and Hang Seng China Enterprises Index (HSCEI) up strongly year-to-date, while other Asian indices displayed varying degrees of momentum:
| Index |
Close |
1D % |
1W % |
1M % |
YTD % |
| DJIA |
42,270.1 |
0.1 |
1.0 |
2.3 |
(0.6) |
| S&P 500 |
5,911.7 |
(0.0) |
1.2 |
4.0 |
0.5 |
| FTSE 100 |
8,772.4 |
0.6 |
0.4 |
2.0 |
7.3 |
| HSI |
23,289.8 |
(1.2) |
(1.3) |
3.5 |
16.1 |
| HSCEI |
8,432.0 |
(1.5) |
(1.8) |
2.4 |
15.7 |
| KOSPI |
2,697.7 |
(0.8) |
4.1 |
5.4 |
12.4 |
| Nikkei 225 |
37,965.1 |
(1.2) |
2.2 |
3.1 |
(4.8) |
| Brent Crude (US\$/bbl) |
64 |
1.6 |
(1.5) |
4.0 |
(14.6) |
China Economic Update: PMI Trends and Analysis
Manufacturing and Non-Manufacturing PMI in May 2025
- Manufacturing PMI rose to 49.5 (+0.5pt MoM), indicating stabilization but remaining in contraction territory.
- Manufacturing output rebounded to 50.7 (+0.9pt), returning to expansion.
- New orders improved to 49.8 (+0.6pt), while new export orders jumped 2.8pts to 47.5 following a Sino-US tariff suspension.
- Imports surged to 47.1 (+3.7pt), and business confidence edged up to 52.5 (+0.4pt).
- Non-manufacturing PMI held steady at 50.3 (-0.1pt), slightly below consensus, with services at 50.2 (+0.1pt) and construction easing to 51.0 (-0.9pt).
- New export orders for non-manufacturing PMI rose sharply to 48.0 (+5.8pt).
| Indicator |
May 25 |
MoM Change |
Apr 25 |
Mar 25 |
| Manufacturing PMI |
49.5 |
+0.5 |
49.0 |
50.5 |
| Manufacturing Output |
50.7 |
+0.9 |
49.8 |
52.6 |
| New Orders |
49.8 |
+0.6 |
49.2 |
51.8 |
| New Export Orders |
47.5 |
+2.8 |
44.7 |
49.0 |
| Imports |
47.1 |
+3.7 |
43.4 |
47.5 |
| Business Expectations |
52.5 |
+0.4 |
52.1 |
53.8 |
| Non-manufacturing PMI |
50.3 |
-0.1 |
50.4 |
50.8 |
| Services PMI |
50.2 |
+0.1 |
50.1 |
50.3 |
| Construction PMI |
51.0 |
-0.9 |
51.9 |
53.4 |
- Large enterprises led the rebound (50.7, +1.5pt), while medium (47.5, -1.3pt) and small companies (49.3, +0.6pt) lagged, reflecting uneven policy transmission.
- Despite stable PMI, the data remains market-neutral and highlights the need for more targeted stimulus to drive a sustainable recovery.
Macau Gaming Sector: May 2025 Performance and Outlook
Strongest GGR Since Reopening
- May 2025 gross gaming revenue (GGR): MOP\$21.2 billion (+5% YoY, +12% MoM).
- GGR exceeded consensus by 3%, marking the highest monthly figure since border reopening in January 2023 and reaching 82% of 2019’s level.
- April 2025 visitations: 3.1 million (+1% MoM, +19% YoY), now at 90% of 2019’s level.
- Mainland China arrivals: 2.1 million (-2% MoM, +22% YoY).
- Same-day visitor arrivals: 1.8 million (-1% MoM, +30% YoY).
- Overnight visitors: 1.3 million (+4% MoM, +7% YoY), with average stay at 1.6 days.
Hotel and Visitor Spending Trends
- Hotel occupancy rate in April 2025 dropped to 92.6% from 93.9% in March.
- Average room rate eased to MOP\$1,275 from MOP\$1,287.
- Total visitor spending in 1Q25: MOP\$19.6 billion (+2% QoQ, -4% YoY).
- Per capita visitor spending: MOP\$1,989 (-6% QoQ, -13% YoY).
- Spending breakdown: Shopping 46%, Accommodation 24%, Food & Beverage 23%, Transport 4%.
Top Sector Picks and Peer Comparison
Galaxy Entertainment (27 HK) remains the preferred stock due to its premium positioning and diversified entertainment offerings. The target price is HK\$43.00, implying a significant upside, with the share currently trading at 8.9x 2025 EV/EBITDA.
| Company |
Ticker |
Rec |
Price (HK\$) |
Target Price (HK\$) |
Upside (%) |
Market Cap (US\$m) |
2025F PE (x) |
2026F PE (x) |
2025F P/B (x) |
2026F P/B (x) |
2025F EV/EBITDA (x) |
2026F EV/EBITDA (x) |
2025F ROE (%) |
2025F Div Yield (%) |
| Galaxy |
27 HK |
BUY |
33.40 |
43.00 |
28.7 |
18,634.85 |
14.4 |
13.2 |
1.8 |
1.7 |
8.9 |
8.1 |
12.9 |
4.4 |
| Sands China |
1928 HK |
BUY |
15.42 |
22.00 |
42.7 |
15,915.72 |
13.3 |
11.3 |
9.3 |
6.1 |
9.1 |
7.9 |
87.4 |
3.3 |
Top Trading Turnover: Hong Kong Market
- Meituan (HK\$138.00, -1.5%) — 5-day ADT: HK\$10,098.2m
- Xiaomi (HK\$50.95, -1.5%) — 5-day ADT: HK\$8,033.8m
- Alibaba (HK\$113.90, -3.6%) — 5-day ADT: HK\$7,602.4m
- HKEX (HK\$395.80, -1.1%) — 5-day ADT: HK\$3,271.2m
Top Gainers
- Shandong Hi-Speed (HK\$12.42, +6.7%)
- CSPC Pharmaceutical (HK\$8.10, +6.3%)
- Li Auto Inc-A (HK\$112.30, +3.8%)
- CKI Holdings (HK\$50.75, +2.1%)
- WH Group (HK\$7.24, +1.7%)
Top Losers
- Orient Overseas (HK\$135.10, -6.7%)
- BYD Electronic (HK\$31.15, -6.0%)
- Horizon Robotics (HK\$7.12, -5.9%)
- China Resources Gas (HK\$20.90, -5.6%)
- Xpeng Inc-A (HK\$76.35, -5.0%)
Hang Seng Index and Hang Seng Tech Index Outlook
Hang Seng Index (HSI)
- Last close: 23,289.77
- Expected range: 22,600–24,800
- After a six-week rally, HSI saw consolidation with resistance at 23,800–24,000.
- Trading remains above major moving averages but momentum is fading (14-day RSI at 50, daily MACD turned negative).
Hang Seng Tech Index
- Last close: 5,170.43
- Expected range: 4,400–5,500
- Recent rally peaked; index underperforms HSI with further correction possible.
- Trading volume increased, momentum indicators suggest consolidation ahead.
Key Macro Assumptions (2024–2026)
| Region |
2024 GDP (%) |
2025F GDP (%) |
2026F GDP (%) |
| US |
2.8 |
1.8 |
2.5 |
| Euro Zone |
0.7 |
0.9 |
1.2 |
| Japan |
0.1 |
1.0 |
1.5 |
| Singapore |
4.4 |
2.5 |
1.8 |
| Malaysia |
5.1 |
4.7 |
4.8 |
| Thailand |
2.5 |
2.9 |
3.0 |
| Indonesia |
5.0 |
5.2 |
5.3 |
| Hong Kong |
2.5 |
2.2 |
2.5 |
| China |
5.0 |
4.2 |
4.2 |
Commodity price assumptions: CPO (RM/mt) at 4,180/4,500/4,000 for 2024/2025/2026, and Brent crude (US\$/bbl) at 80.0/70.0/67.0 respectively.
Conclusion: Navigating Opportunities Amid Stabilization and Recovery
China’s latest PMI data and Macau’s gaming renaissance point to areas of opportunity and risk. While economic stabilization is underway, growth remains patchy and in need of policy support. Macau’s gaming sector is showing robust recovery, with clear leaders emerging. Investors are advised to monitor key macro events and technical resistance levels in the HSI and TECH Index to identify actionable entry and exit points.
Report prepared by UOB Kay Hian (Hong Kong) Limited, 2 June 2025.
