A recent research report from JPMorgan indicates that Macau's gross gaming revenue (GGR) for February increased by 4% year-on-year to MOP 20.6 billion, with a daily average revenue of MOP 737 million, both surpassing market and the bank's expectations. More importantly, driven by strong end-of-month demand from high-end customers, the average daily revenue in the final week of February reached approximately MOP 1 billion, a significant improvement compared to the relatively subdued performance during the Lunar New Year holiday. However, the bank attributes the muted holiday performance primarily to timing factors, noting that this year's peak Lunar New Year period occurred later than usual, rather than reflecting underlying weakness in demand.

Including February's data, GGR for the first two months of the year grew by 14% compared to the same period last year, recovering to 86% of pre-pandemic levels, consistent with the strong growth momentum seen in the second half of last year. Despite this, the bank believes that March's GGR performance is unlikely to catalyze sector share prices, as investor focus has shifted towards margins and EBITDA growth. While JPMorgan acknowledges early signs of quarterly improvement, it continues to advise a selective approach within the sector.

Among the gaming operators, the bank's top pick is Galaxy Entertainment (00027) with a target price of HK$52. This is followed by Sands China Ltd (01928) and MGM China (02282), with target prices of HK$22 and HK$18, respectively. Wynn Macau (01128) has a target price of HK$8, with all of these stocks receiving an "Overweight" rating. In contrast, SJM Holdings (00880) and Melco Int'l Dev (00200) received "Underweight" ratings, with target prices of HK$2 and HK$3.5, respectively.