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A broker has cut Macau's forecast for bulk gaming sales (GGR) for the second half of the year by "3% to 4%" to 113% for the same period in pre-COVID trading, meaning it will be somewhat flat compared to the first half of this year.

JP Morgan Securities (Asia-Pacific) said the update was set against the backdrop of a "frustratingly sluggish macro," which was understood to mean consumer demand was easing in mainland China's tourist and gambler markets, a major source of Macau.

Brokerage analysts DS Kim, Mupan Xie and Selina Li said they had "drastically cut 10%/30% from gaming/non-retail sales," especially for Macau operator Sands China, which reported second-quarter earnings with parent Las Vegas Sands on Wednesday.

This was meant to "reflect the deterioration of high-end consumption in China, as indicated by big mistakes and guidance cuts by European luxury goods companies over the past few weeks."

As a result, the brokerage lowered Sands China's 2024 full-year interest, taxation, depreciation and amortization adjusted earnings (EBITDA) estimate by 8.4% from $2.55 billion to less than $2.34 billion.

Analysts added that Sands China will reduce its full-year and full-year EBITDA for 2024 and 2025 by 10% overall compared to second-quarter earnings consensus, after the company reported "slow earnings in the second quarter" compared to market expectations.

The agency suggested that for Sands China, there would be no positive "inversion" to its performance until it remodeled a shutdown of the group's Kotai property, The London Macau, at the end of the year.

"We still have five months to go before the Sands-specific positive inflection point, namely the disruption of renovations, begins to ease significantly," the analysts wrote.

They added: "Renovation Casino/Athology/Room merchandise is set to return online in phases beginning in December 2024, so we expect EBITDA to improve gradually in 2025 to hit approximately $700 million by Q4 2025."

Joe Greff, Samuel Nielsen and Ryan Lambert of US-based JP Morgan Securities LLC forecast that the post-disruption period "will likely lay the groundwork for the London [Macao] ramp and exceed Macao's peer EBITDA growth in 2025."

The U.S. team also noted: "In terms of return on capital, Las Vegas Sands is in stable share buyback mode at the $400-$500 million-per-quarter level, but we would like to see it at the top of the range."