Huatai Securities noted in a report that MELCO INT'L DEV (00200.HK)  +0.140 (+2.134%)    Short selling $1.71M; Ratio 4.445%   's Macau segment GGR in 1FQ24 recovered less than the industry, with GGR recovering to 72% compared to the same period in 2019, lower than the industry's 75%. Among the various business segments compared to 1FQ19, VIP business recovered to 23%, lower than the industry's 39%; mass business recovered to 114%, higher than the industry's 113%; and slot machine business recovered to 88%, higher than the industry's 86%.

The broker forecasted MELCO's GGR to be $36.991 billion and $40.293 billion in FY25 and FY26 respectively, recovering to 79% and 86% respectively when compared to FY19. For each of these business segments in FY25/FY26, compared to the same period in 2019, VIP business is expected to recover to 29% and 31% respectively; casino business is forecasted to recover to 123% and 134% respectively; and slot machine business is predicted to recover to 96% and 101%.

Related NewsUBS Considers Expansion of IVS Positive to MO
The broker also forecasted MELCO's adjusted EBITDA for FY25 and FY26 to be $10.291 billion and $11.221 billion respectively. The EBITDA margins for the same period are estimated to be 26.8% and 26.5% respectively.

Huatai highlighted that the Chinese National Immigration Administration has extended the duration of stay in Macau for business visas from 7 days to 14 days. It also allowed mainland residents joining Hengqin-Macau Group Tours to travel to and from Hengqin and Macau freely within 7 days after entering Macau on a "group in-group out" basis. This is expected to change the hotel choices of Macau tourists, relieve the pressure on Macau hotels and effectively extend the length of stay of tourists in the city.

Based on the above factors, Huatai set a target price of $7.6 for MELCO and maintained its Buy rating.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-05-17 16:25.)

Related NewsUBS Ratings, TPs on MO Casinos (Table)