By Kimberley Kao

Shares of gaming stocks in Hong Kong fell after Macau reported that gaming revenue fell for the second-straight month and continued to hover below pre-pandemic levels.

Gross gaming revenue for one of the world's biggest gambling hubs fell 5.6% in January, compared with the same period a year earlier, to 18.25 billion patacas, equivalent to $2.27 billion, according to data released by Macau's gaming regulator over the weekend.

Citi analysts estimate that this figure missed consensus projections by about 6%.

This marks the second consecutive month that revenue has dropped on an on-year basis, after having increased for 11 months in 2024.

Shares of Sands China dropped 6.1% and Galaxy Entertainment Group lost 6.5% at midday, while MGM China and Melco International Development fell 3.5% and 4.6% respectively. Hong Kong's benchmark index was 0.7% lower.

Describing the performance as "soft," analysts from JP Morgan Securities (Asia Pacific) said that the pre-Lunar New Year holiday slowdown was very noticeable this year, dragged in part by the lull in visitor traffic from the weekend before. This affected large properties in particular, the analysts said.

Jefferies research analysts said the seasonal slowdown ahead of the holidays was worse than expected. In particular, Sands China and Galaxy Entertainment likely lost market share in January as compared to the fourth quarter, as both focus on the mass gaming segment, the analysts said in a note. However, positive momentum will likely pick up thanks to the Lunar New Year holiday, a seasonally strong catalyst for revenue, they said.

"The jury is still out there if January's miss was a temporary blip or indicative of a lasting trend," JP Morgan analysts said.

JP Morgan retained its forecast for gross gaming revenue to grow by about 5% this year.

The event calendar post-holidays include concerts by well-known South Korean artists which should bode well for visitor numbers, Citi research analysts said in a note.

The city reported about 3 million visitor arrivals in December, up 3.3% on year. It will release data for January later this month.

Write to Kimberley Kao at kimberley.kao@wsj.com

(END) Dow Jones Newswires

February 02, 2025 23:11 ET (04:11 GMT)

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