This week, Studio City International(NYSE: MSC) handsomely rewarded investors who placed bets on its stock. The company saw its share price rise by nearly 15% across the five trading days, according to data compiled by S&P Global Market Intelligence. Macao is getting busy, and Studio City is and should continue to be one of the beneficiaries of that trend.
Macao crowds are coming back
Studio City operates a large casino resort in the Cotai section of Chinese gambling enclave Macao. Happily for the company, official statistics showed a dramatic rise in gambling revenue for Macao recently that topped expectations.
Specifically, the country's Gaming Inspection and Coordination Bureau published its Macao statistics for March. These revealed a 53% year-over-year increase in gross gaming revenue to 19.5 billion patacas ($2.4 billion), which was higher than the average 49% projection from analysts.
Like Macao's counterpart Las Vegas, the enclave suffered greatly during the coronavirus pandemic. It has yet to fully recover; despite those encouraging growth numbers, that March revenue figure was only around 75% that of March 2019.
Still, a 53% gain is nothing to sneeze at, and it shows that the authorities and various resort owners are doing a decent job attracting gamblers and tourists to Macao, and encouraging them to spend money.
Still in recovery mode
This is the kind of good news Studio City investors have been craving. At the end of February, the company published its fourth-quarter and full-year 2023 earnings. While it showed very robust growth on the top line as it continues to emerge from the pandemic years, it was still well in the red on the bottom line in both periods.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
