The bank revised the sector’s adjusted EBITDA due to dwindling confidence in the sustainability of Macau casino profit margins.
Macau.- JP Morgan has lowered its full-year 2026 forecast for adjusted EBITDA in the Macau gaming industry to MOP71.9 bn (US$8.95 bn). According to a note released on Friday, this figure represents around 3–4 per cent below Street estimates, or “average minus 6 per cent excluding Galaxy Entertainment Group Ltd.”
The bank revised the sector’s adjusted EBITDA due to dwindling confidence in the sustainability of Macau casino profit margins. The report stated that while Macau casino GGR has exceeded even the highest expectations each quarter since June, operator margins have yet to reflect this growth. The bank’s analysts noted: “We still think GGR recovery has legs this year, but our confidence in the profit upcycle has dimmed.”
Despite the revision, JP Morgan’s 2026 adjusted EBITDA estimate remains 5.0 per cent higher than its MOP68.5 bn (US$8.5bn) outlook for 2025, with operators yet to release their figures.
The bank observed that while GGR grew in the second and third quarters of 2025, profit growth at casino operators lagged, and a similar gap is expected in the fourth quarter due to rising operating costs and a growing VIP bias.
Operating expenses rose by about 7 per cent in full-year 2025, compared with typical inflation of around 3 per cent, while VIP revenue accounted for 16 per cent of GGR, up from 12 per cent in 2024, according to analysts DS Kim, Selina Li, and Lindsey Qian.
JP Morgan noted that while revenues improved in 2025, EBITDA growth lagged, increasing around 6 per cent, or 1–2 per cent on a VIP-normalised basis, below its initial 4 per cent forecast. The bank also estimated that gross EBITDA margins fell to 23.3 per cent in 2025, down from 23.7 per cent in 2024, a performance the analysts described as disappointing, with no sign of profit scalability.
The bank revised the sector’s adjusted EBITDA due to dwindling confidence in the sustainability of Macau casino profit margins. Macau.- JP Morgan has lowered its full-year 2026 forecast for adjusted…
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