Broker: UOB Kay Hian
Date of Report: Monday, 04 August 2025

Macau Gaming Sector Surges: July Gross Gaming Revenue Hits Post-Pandemic High, 2025 Outlook Upgraded

Strong July Performance: Macau Gaming Revenue Exceeds Expectations

Macau’s gaming sector continues to deliver impressive recovery signals, with July 2025 gross gaming revenue (GGR) coming in at MOP\$22.1 billion—a 19% year-on-year increase and 5% higher month-on-month. This figure not only surpassed market consensus by 5% but also set a new post-pandemic high, achieving 90% of the 2019 pre-pandemic level. This robust performance is particularly notable given that the third quarter is typically considered a low season ahead of the crucial October Golden Week.
In light of the ongoing recovery, UOB Kay Hian has revised its full-year GGR forecast upward by 4% to MOP$242 billion, representing a 7% year-on-year growth and an 83% recovery of 2019’s level. The brokerage maintains an OVERWEIGHT stance on Macau’s gaming sector, with Galaxy (27 HK) remaining the top pick.

Macau Visitation Recovery Nears Pre-Pandemic Levels

– Visitations to Macau in June 2025 reached 2.9 million, marking a 13% year-on-year increase despite a 14% month-on-month decline, equating to 93% of the visitation levels seen in 2019. – Mainland China visitors accounted for 2.0 million arrivals, up 21% year-on-year but down 18% month-on-month. – Same-day visitor arrivals fell 19% month-on-month but soared 22% year-on-year to 1.6 million. – Overnight visitors decreased 7% month-on-month but increased 4% year-on-year to 1.3 million, with the average stay stable at 1.6 days. – For the first half of 2025, total visitations climbed 15% year-on-year to 19.2 million, achieving 95% of 2019’s levels, with same-day visitors representing 58% of total arrivals.
Despite a rise in day trips, the sustained increase in visitation is driving a recovery in the base mass segment, a trend confirmed by Sands China management.

Macau Hotel Industry: Occupancy and Room Rates Remain Resilient

– The overall hotel occupancy rate was robust at 92.9% in June 2025, a marginal dip from 93.0% the previous month. – Average room rates softened to MOP\$1,261 in June from MOP\$1,371 in May. – These metrics indicate strong demand, even as seasonal factors and the mix of visitor types shift.

Top Sector Pick: Galaxy Entertainment Group (27 HK)

Galaxy continues to stand out due to its strategic focus on the premium segment and a strong calendar of entertainment events, supporting both visitor growth and market share retention.
Recommendation: BUY (Overweight maintained)
Current Share Price: HK$37.90
Target Price: HK$43.00
2025 Target EV/EBITDA Ratio: 12.0x (the stock currently trades at 10.3x for 2025 and 9.4x for 2026)
Galaxy’s strong fundamentals and entertainment-driven strategy position it well for sustained performance in the current recovery phase.

Sector Peer Comparison Table

Market Trends: Monthly GGR and Visitor Insights

– Monthly GGR has shown an upward trajectory, now at 90% of 2019’s level. – Mainland Chinese visitors (both IVS and group tours) continue to account for the bulk of arrivals, with recovery rates tracking closely to pre-pandemic benchmarks. – Overnight visitor numbers and hotel occupancy rates reflect strong demand, especially in premium segments.

Conclusion: Macau Gaming Sector Positioned for Further Growth

Macau’s gaming sector is demonstrating a robust and sustained recovery, with July’s GGR figures beating expectations and visitation levels approaching full normalization. With the upward revision of the full-year GGR forecast and strong momentum in mass and premium segments, the sector remains attractive for investors. Galaxy, with its premium positioning and entertainment-driven approach, stands out as the preferred pick. Sands China also maintains a solid outlook with high return on equity and attractive dividend yield.

Key Takeaways for Investors

• July 2025 GGR sets new post-pandemic record, up 19% year-on-year.
• Full-year GGR forecast raised to MOP\$242 billion, 7% growth expected in 2025.
• Visitation recovery supports growth in both mass and premium gaming segments.
• Galaxy remains top pick for exposure to Macau’s gaming rebound, with Sands China also recommended.
• Hotel occupancy and visitor metrics indicate robust tourism demand.

For investors seeking exposure to the ongoing recovery in Macau’s gaming sector, the combination of sustained GGR growth, near-normalization of visitations, and resilient hospitality metrics makes the sector compelling, with Galaxy and Sands China leading the way.