HK Stock Market Move | The gambling stocks continue to decline and it is expected that the profitability of the industry will deteriorate in the near future. Growth in the second half of the year is expected to slow down.

The gambling stocks continue to fall. As of the time of writing, MELCO INT'L DEV (00200) fell by 5.49% to 4.13 Hong Kong dollars; GALAXY ENT(00027) fell by 3.64% to 33.88 Hong Kong dollars; SJM HOLDINGS(00880) fell by 2.38% to 2.05 Hong Kong dollars; and MGM CHINA(02282) fell by 2.24% to 10.93 Hong Kong dollars. On the news front, Macau's total gambling revenue (GGR) for the first quarter of 2026 increased by 14% year-on-year to 65.9 billion Macau dollars. Lyon recently released a research report stating that although Macau's GGR performance in the first quarter of 2026 was good, Lyon believes that the potential for positive surprises in the future has decreased. They anticipate that industry profitability will deteriorate in the near term, leading the growth of Macau's GGR by about six months. However, the strengthening of the renminbi is expected to provide support. Furui released a research report stating that a steady start in early April supports the current level of casino stock prices, but is generally neutral for the entire industry, mainly due to the end of the easy comparison base and the impact of geopolitical factors. Morgan Stanley previously predicted that due to the base effect affecting gambling revenue in the second half of the year, growth will slow down, and the basic situation will remain weak. The bank expects gambling revenue to slow down year-on-year from May, with negative EBITDA growth in the second and third quarters.