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The Macau gaming sector has experienced a strong recovery post-Covid, as tourist numbers hit record highs. That, coupled with a scarcity of other Chinese high-yield issuers, has helped the city’s gaming operators emerge as HY favorites.

In this report, we explore the performance, industry landscape, and key themes of Macau's concession operators.

TL;DR

• Following the downfall of Suncity's Alvin Chau, the Macau’s junket operators underwent a structural downsizing. VIP rooms closed as regulations tightened and mass market became a major contributor of gaming revenue
• Concession operators have been tapping the bond market to refinance debt and fund expansion plans, with another expected to issue its maiden dim sum bond this month
• Record-high tourist arrivals in Macau have supported the gaming sector's recovery, while foreign competition has put pressure for operators to improve efficiency. The shutdown of satellite casinos is expected to benefit operators’ profitability in the long run, despite one-off costs and impacts