First Shanghai released a research report saying that maintaining the “buy” rating of Aobo Holdings (00880) is believed to benefit as Macau recovers; at the same time, climbing the “Shanghai Lisboa” slope will enhance the Group's long-term growth and competitive advantage; continue to be optimistic about the future development of Aobo, with a target price of HK$3.28. The company's gross gaming revenue in the fourth quarter of 2023 increased 9% month-on-month to HK$6.74 billion (same as below) (recovering to 65.7% in the same period in 2019).
According to the report, in terms of business, the performance of “Grand Lisboa” and other casinos: gaming revenue from “Grand Lisboa” and other self-operated and satellite casinos increased by +16.4%, -1%, and +10.8%% month-on-month respectively to 1.71 billion yuan, 1.17 billion yuan, and 2.55 billion yuan (recovering to 52.5%, 70.9% and 49.3% in the same period in 2019, respectively); their EBITDA was 480 million yuan, 320 million yuan, and -50 million yuan, respectively, in the same period in 2019. The Group currently has 9 satellite entertainment companies. After deducting the impact of the 5 satellite entertainment companies that have been discontinued, the EBITDA of satellite casinos is 82 million yuan.
Performance of “Grand Lisboa”: “Grand Lisboa” recorded revenue of 1.16 billion yuan (782 million yuan for gaming — 51% of “Grand Lisboa”, and 282 million yuan for non-gaming), an increase of 6.5% over the previous year. EBITDA turned a loss into a profit of 2 million yuan. The project's daily operating expenses increased 5.6% month-on-month to 6.5 million yuan. The market share of “Haute Lisboa” is about 1.8%. With the launch of more products, the number of promoters and the improvement of customer quality, the long-term market share is expected to increase to 4-6%; the future growth potential is huge.