Macau:New UnionPay rule on overseas cash withdrawal limit;limited impact
Buy on dips as new UnionPay rule likely limited impact
Dec GGR ended up only +14.6% yoy, below mkt expectations (20% yoy).
AsMacau’s top 2junkets are still seeing strong rolling in Dec, we
suspect the misscame from smaller junkets who were more impacted by
tighter liquidity towardsyear-end. Additionally, on 30Dec, China’s forex
regulator (SAFE) issued a newrule limiting UnionPay overseas ATM cash
withdrawal amount to Rmb100k perperson per year, irrespective of the no.
of cards own (previously Rmb100k percard per year). Near term, sector
valuation is likely to get hit as regulatory risksheightened. But we are
not too concerned as the most important channel formass players to get
cash in Macau is to use UnionPay for fake purchases in localpawnshops.
As this channel remains unaffected, we see limited impact on
GGR.Reiterate our positive view on Macau where we forecast 2018GGR to
grow 17%(vs consensus 12%). Top picks: Wynn Macau (Buy) & Galaxy (Buy)
given bothare market share gainers.