On July 31, Hong Kong stocks were mixed, but the gaming sector bucked the trend and became the biggest highlight. By close, gaming stocks broadly rose: Sands China (01928.HK) surged 4.52%, Galaxy Entertainment (00027.HK) gained 3.87%, Melco International Development (00200.HK) rose 2.98%, Wynn Macau (01128.HK) added 2.65%, and MGM China (02282.HK) rose 2.31%. Several stocks hit one-month highs with significantly higher turnover.

Macau July gaming revenue beats expectations

On the news front, Macau's Gaming Inspection and Coordination Bureau announced on July 31 that gross gaming revenue for July 2026 reached MOP 18.5 billion, up 12.1% year-on-year, above the market consensus of MOP 17.5 billion. This marked the ninth consecutive month of year-on-year growth, with the pace accelerating from June's 9.8%.

On a daily basis, July's average gaming revenue was about MOP 597 million, stable. Cumulative gross gaming revenue for the first seven months reached approximately MOP 120.4 billion, up 15.6% year-on-year, equivalent to about 82% of the same period in 2019. Mass-market gaming revenue has recovered to over 95% of pre-pandemic levels, while VIP business lagged but remained on a steady recovery path.

Multiple factors drive sector strength

Analysts said the recent strength of the gaming sector is driven by multiple factors. First, the individual travel scheme for mainland residents to Hong Kong and Macau has been expanding, with more mainland cities added as individual-visit cities, bringing more visitors to Macau. Second, transport infrastructure in the Guangdong-Hong Kong-Macao Greater Bay Area keeps improving, with shorter travel time on the Hong Kong-Zhuhai-Macao Bridge and a notable increase in visitors entering Macau via Hong Kong. In addition, the Macau SAR government has recently rolled out measures to boost cultural tourism consumption, including extending business hours and hosting large-scale performances, effectively lifting tourists' spending appetite.

Citi's research report noted Macau's gaming industry is in a new recovery stage of "mass-market driven, VIP stabilizing." July revenue data further confirmed this trend. The bank raised its 2026 Macau gaming revenue forecast to MOP 232 billion, equivalent to 83% of 2019. Meanwhile, given the average EV/EBITDA (enterprise value/earnings before interest, taxes, depreciation and amortization) of gaming stocks at about 12 times, below the historical average of 15 times, valuation still has about 20% recovery room.

Institutional views and outlook

CICC said policy risks for the gaming sector have largely been released and industry fundamentals continue to improve. With the traditional peak season in the second half, Macau is set to host a series of major events, such as the International Fireworks Display Contest and food festival, which could further boost gaming revenue. The bank recommends focusing on companies with a high proportion of mass-market business and lower debt-to-asset ratios, believing they have greater earnings elasticity.

However, cautious voices warn that global economic downside pressure may dent high-end spending appetite, and intensifying gaming competition in neighboring regions such as Singapore and Japan could divert Macau's VIP business. Investors should watch short-term volatility and track upcoming monthly data and interim results from gaming companies.

Related stocks overview

  • Sands China (01928.HK): Closed at HK$22.80 on July 31, up 4.52%, turnover HK$1.23 billion.
  • Galaxy Entertainment (00027.HK): Closed at HK$38.50, up 3.87%, turnover HK$980 million.
  • Melco International Development (00200.HK): Closed at HK$5.80, up 2.98%, turnover HK$120 million.
  • Wynn Macau (01128.HK): Closed at HK$6.65, up 2.65%, turnover HK$210 million.
  • MGM China (02282.HK): Closed at HK$12.35, up 2.31%, turnover HK$340 million.

Risk disclaimer

The stock market involves risks; invest with caution. This article does not constitute any investment advice. Investors should make prudent decisions based on their own risk tolerance.