CLSA analysts Jeffrey Kiang and Leo Pan said these factors are continuing the growth momentum in gross gaming revenue (GGR) that has been building since mid-2025.

In its latest investment memo, CLSA raised its forecasts for gross gaming revenue (GGR) for the gaming industry by 1.3% in 2025 and 3.5% in 2026, projecting revenues to reach HK$245.7 billion (US$30.6 billion) and HK$255.6 billion (US$31.8 billion), respectively. The brokerage highlighted the "strengthening of the RMB against the US dollar" and improving macroeconomic conditions in China as the primary drivers of these revisions.

While the company raised its forecasts for 2025 and 2026, it left its 2027 forecast largely unchanged, expecting gross gaming revenue to reach HK$269.3 billion (US$33.5 billion), 92% of 2019 levels.

However, analysts caution that the next upgrade cycle may depend on the stabilization of China's property prices, which they see as an important catalyst for consumer confidence and spending power.

Strong performance in Q2 2025 continues into Q3

Macau casino operators maintained their growth momentum in the third quarter following strong second-quarter results. CLSA noted that August gross gaming revenue (GGR) was 1% higher than expected, driven by a 0.4% appreciation of the RMB since July and stronger factory profitability indicators in China.

Tourism demand also boosted Macau's performance. Analysts reported that 33 of the 38 hotels they tracked were fully booked for the upcoming October Golden Week, typically one of Macau's busiest periods. Average hotel room rates rose 13% compared to the same period last year, indicating strong tourist demand. "Macau's strong revenue momentum has continued so far this quarter," the report noted.

Against this backdrop, CLSA expects gross gaming revenue to grow 10% year-on-year to 18.9 billion patacas (US$2.35 billion) in September.

The report mentioned that Leif Eskesen, chief economist at CLSA, expects the RMB to appreciate to 7.13 against the US dollar by the end of 2025 and further to 7.10 by the end of 2026. The appreciation of the RMB is seen as a tailwind for Macau's gaming industry as it will boost outbound tourism from mainland China, which accounts for more than 70% of Macau's total tourists.

The correlation between a strong RMB and Macau casino valuations is also statistically significant. Data from CLSA shows a strong mathematical relationship between RMB strength and investor valuations of gaming companies since January 2023. The report explains: "This suggests future growth in the industry's gross gaming revenue (GGR) due to increased outbound tourism from mainland China, setting the stage for a share price re-rating."

Based on the revised forecasts, CLSA now expects the industry's EBITDA to rise to $8.4 billion in 2025, a year-on-year increase of 7%, and further increase to between $8.9 billion and $9.7 billion in 2026-2027.