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Macao operator's EBITDA could return to 2019 levels.

Our expectations are based on a recovery in the mass segment, leading to a split of gross gaming revenue (GGR), which will result in a higher EBITDA margin, CICC analysts said.

With high stakes players still reluctant to come back due to Beijing's suppression of cross-border money transfers, Macao's hopes for a rebound in the near future lie with the mass and mass premium players. Should this scenario come true, and recent data suggest it does, it will be beneficial for operators such as Las Vegas Sands (NYSE: LVS) and Galaxy Entertainment. This couple is less dependent on VIPs than some rivals.

New Cotai Shipment Helps Macau EBTIDA

According to CICC, the new offers on the Cotai Strip will be key to bringing operators' EBITDA back to 2019 levels.

A new integrated resort of Sands China, London's Macau, worth $ 2 billion, emerged last week. Grand Lisboa Palace SJM Holdings is slated to open at some point this year, although a specific date is not yet known. The third phase of the Galaxy Macau could end with government inspections in the first half of this year and be ready to receive visitors in the third quarter.

The Galaxy Macau effort is especially important as it offers new non-gaming amenities, such as a 500,000 square foot arena and 400,000 square feet of conference space. As the license renewal is imminent next year, operators are looking to bolster their non-gaming offering as Macao is looking for more diversity in the local economy.

"Overall, we estimate Macao [across the market] will add the net to 2,800 hotel rooms in 2021, representing a 7.5 percent increase over the existing 37,293 rooms," CICC analysts said .

A bullish GGR forecast

Entering 2021, there were signs of hope for Macao concessionaires and some said they were hitting the EBITDA break-even point in October and November. The consensus among market observers was that the group would begin a serious recovery in the second half of this year.

CICC analysts forecast 2020 EBITDA for Macao operators from - $ $ 1.74 billion, but add that the figure will turn positive at $ $ 4.45 billion this year and $ $ 9.6 billion in 2022 Analysts and investors can get Some insight into 2021 views later today as LVS delivers quarterly results.

While EBITDA may return to 2019 levels by the end of this year, this may be a case of newly realized operational efficiency rather than higher revenues. CICC estimates it will be 2023 or 2024 before Macao's GGR returns to pre-pandemic levels .

Forecasting that mass market players could generate up to 80 percent of GGR in 2021, the bank says the year-on-year growth in gaming revenue could be 168 percent.

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