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<Research>G Sachs Expects MO Casino Stocks to Deliver Solid 4Q Results, Lowers MGM CHINA's TP to HKD18.4
Recommend 22 Positive 40 Negative 26 |
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Macau's GGR rose by 15% YoY to MOP20.9 billion last month, reaching the lower end of market expectations, partly due to VIP room win rates falling below normal levels in the last 1-2 weeks, according to a Goldman Sachs report. Given the strong momentum in GGR over the past few months, Goldman Sachs expects Macau casino stocks to announce solid Q4 results in the coming weeks. The industry quarterly GGR swelled by 14% YoY to MOP66.1 billion, accelerating compared to the 1-13% YoY growth in 1-3Q25, recovering to 92% of pre-pandemic levels in 2019. Channel surveys also indicate that GALAXY ENT (00027.HK) and WYNN MACAU (01128.HK) slightly increased their market share last month; GALAXY ENT, MGM CHINA (02282.HK), and SANDS CHINA LTD (01928.HK) might be market share winners in 4Q25; and SJM HOLDINGS (00880.HK), WYNN MACAU, and Melco Resorts & Entertainment lost market share. Goldman Sachs also highlighted MGM CHINA's announcement about a doubling of its royalty fee to 3.5% of net revenue starting this year, with the annual cap raised to USD188.3 million. Based on an estimated EBITDA margin forecast of 29-30% and with no changes made to other conditions, the new agreement implies a 6-7% cut in EBITDA forecasts and a 13-14% drop in earnings forecasts for FY26-27. Consequently, the broker lowered MGM CHINA's target price from HKD20.1 to HKD18.4. AAStocks Financial News |
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