2nd UPDATE: Macau November Gambling Revenue Up 42% On Year

Macau's November gambling revenue surged 42% from a year earlier to its second-highest monthly total, exceeding analysts' expectations despite falling short of the record high set just one month prior.

November revenue totaled MOP17.35 billion (US$2.2 billion), up sharply from MOP12.22 billion a year earlier but 8.1% below October's MOP18.87 billion, according to data from Macau's Gaming Inspection and Coordination Bureau.

Analysts said the amount came as a surprise, because market participants had expected revenue to fall back to around MOP15 billion-MOP16 billion after October's record-breaking number, J.P. Morgan analyst Kenneth Fong said in a research note.

Macau's October gambling revenue surged 50% from a year earlier, setting an all-time monthly high and exceeding analysts' expectations as patronage climbed during the week-long Chinese National Day holiday at the beginning of the month. An extra weekend in October also boosted gambling revenue that month. There were five weekends in October.

November's total was 9% above CLSA's forecast made after the first 21 days of the month. "Gaming activity picked up later in the month after the Grand Prix weekend," CLSA analyst Huei Suen Ng said in a note to clients. The Grand Prix was held in Macau Nov. 17-20. She added Macau gambling revenue for 2010 was likely to rise 56% over 2009 based on the current run rate versus the house's forecast for a 50% rise.

The November figure also exceeded Wells Fargo's original 29% year-on-year growth estimate. November's slowdown compared with the previous month was in line with the average sequential dips in November 2008 and 2009, Wells Fargo analyst Carlo Santarelli said.

Macau's gambling revenue in the January-November period rose 57% from a year earlier to MOP169.46 billion.

Among Macau's six casino license-holders, tycoon Stanley Ho's SJM Holdings Ltd. (0880.HK) continued to lead the market with a share of 32%, followed by Sands China Ltd. (1928.HK) with 15%, according to CLSA. SJM held steady from the previous month while Sands lost four percentage points. CLSA said Sands's market share loss was likely due to a poor hold rate and advised investors against placing too much emphasis on the data given the volatility of month-on-month comparisons.

Melco Crown Entertainment Ltd. (MPEL), co-chaired by James Packer and Lawrence Ho, saw its market share rise to 15% from 14% in September. Wynn Resorts Ltd. (WYNN) unit Wynn Macau Ltd. (1128.HK) saw its market share rise to 17% from 14% in the previous month, according to the report.

MGM Macau, a joint venture between Pansy Ho and MGM Resorts International (MGM), retained its fifth position with a market share of 11%, unchanged from October, and Galaxy Entertainment Ltd.'s (0027.HK) share also held steady at 10% in November, the report said.

Separately, a person familiar with the matter said Wednesday that MGM China Holdings Ltd., MGM Resorts International's joint venture, is targeting an initial public offering ahead of a listing in Hong Kong in the first quarter of 2011 at the earliest.

The final date for the offering hasn't been determined yet, the person said, but the first quarter would represent a delay from MGM China's original plan.

During MGM Resorts' second-quarter earnings conference call on Aug. 3, Chief Financial Officer Dan D'Arrigo said the company hoped to list by the end of this year.

In September, MGM China said it had filed an application to list its shares in Hong Kong.

People familiar with matter told Dow Jones Newswires earlier that BNP Paribas (BNP.FR), Bank of America-Merrill Lynch, J.P. Morgan Chase & Co. (JPM) and Morgan Stanley (MS) are the bankers on the deal, which seeks to raise about US$500 million.

The listing would follow last year's Hong Kong listings of Wynn Resorts's Wynn Macau and Las Vegas Sands Corp.'s (LVS) Sands China.

-By Kate O'Keeffe, Dow Jones Newswires; 852-2802-7002; [e-mail]