Analyst says Macau gaming sector is undervalued

Buying Macau’s gaming sector at the current level will give long-term investors a good entry point, as the sector is undervalued, says Chelsey Tam, Morningstar’s senior equity analyst.

"After Covid-19 is under control, we are very confident that the sector will have room to catch up to our fair value estimates," Tam says.

But Tam adds that though there are policies that indicate reopening Macau's tourism economy, it is possible that some of the reopenings might be paused or reversed with another wave of Covid-19.

Morningstar says SJM (0880) is one of its top picks in Asia's consumer cyclicals industry, as it expects the market share of SJM to hit 14.7 percent by 2029 from 14.4 percent in 2019.