Citigroup has released a research report stating that Macau's gaming revenue for the second quarter of this year was impacted by both the World Cup and extremely unfavorable VIP room win rates, leading to increased operating leverage. The bank forecasts that the industry's EBITDA for the quarter will decline to US$1.923 billion, representing a 7% year-on-year decrease and a 12% sequential drop.

However, the report notes that current industry valuations are nearly two standard deviations below their historical average, suggesting that stock prices have largely factored in the negative developments.

The bank has identified GALAXY ENT (SEHK: 00027) and WYNN MACAU (SEHK: 01128) as its top picks within the sector. Specifically, Citigroup has initiated a 30-day positive catalyst watch for Galaxy Entertainment, anticipating it will be the operator with the largest increase in EBITDA market share for the second quarter.

Beyond these, the bank's preferences in order are MGM China, Sands China, Melco Resorts & Entertainment, and Sociedade de Jogos de Macau. Notably, Citigroup has initiated a 30-day negative catalyst watch for Sands China, expecting it to be the operator with the largest decline in EBITDA market share during the period, projected to fall by 2.5 percentage points to approximately 27%.