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2026-09-03 10:28:00 Management of GALAXY ENT (00027.HK) voiced cautious optimism on the business outlook at the Goldman Sachs Asia Leaders Conference, Goldman Sachs research report said. Impacted by the expansion of the World Cup to 48 teams, Macau GGR was temporarily hit in June and July, but daily run-rate in recent weeks sharply bounced back to MOP710-720 million, while the YoY downfall in August slowed to 1% (vs declines of 12% and 8% in June and July respectively). The broker said the company maintained its view that tighter capital controls have limited impact on GGR trends, as the average daily theoretical loss of most premium mass customers is only about HKD25,000-50,000. The company also entered strategic partnerships with HSBC credit cards, Ant Bank and Xiaohongshu to deepen customer engagement and broaden coverage. On competition, management said it remains intense, particularly in the premium segment, but player reinvestment rates have generally stabilized in recent months. The broker believed the new COO of SANDS CHINA focuses more on cost optimization rather than more aggressive short-term promotions. If execution goes swimmingly and GGR steadily recovers to around MOP730-740 million per day, there could be upside risk to EBITDA margin. Channel checks showed GALAXY ENT maintained about 22% GGR market share in August, while SANDS CHINA recovered to 26%, and Melco and SJM were relatively weak. Regarding shareholder returns, the group's interim DPS for 1H26 has been raised to HKD0.9, marking the third consecutive increase over the past 1-2 years, while the dividend payment cycle has also been shortened from 55 business days to 24. The broker believed HKD0.9 could become the future dividend floor, while the strong balance sheet and cash flow can further bolster dividend growth. The broker maintained its Buy rating with a 12-month TP of HKD51. ~ AASTOCKS Financial News Website: www.aastocks.com | |