Macquarie is optimistic that Galaxy Entertainment (00027) and Sands China (01928) will be renovated this year and beyond, have strong real estate reserves, and sufficient inventory of hotel rooms.
The Zhitong Finance App learned that Macquarie released a research report saying that the profit of Macau gaming stocks in the first quarter is expected to be affected by market share. It is estimated that the market share of MGM China (02282), Wynn Macau (01128), and Aobo Holdings (00880) increased quarterly. The bank's top picks are still Galaxy Entertainment (00027) and Sands China (01928). They are optimistic that they will renovate this year and beyond, have strong real estate reserves, and sufficient inventory of hotel rooms.
According to the report, MGM China benefited from strong marketing activity in January, leading to a market share as high as 20%, but due to low win rates, the market share fell back to 13% to 17% in February and March. The bank expects MGM's market share in China to be 17% in the first quarter. Compared with a slight increase of 16% in the fourth quarter of last year, adjusted EBITDA is expected to increase 65% year-on-year, and 6% quarterly. The bank believes that with the launch of the new project, the company's momentum was strong in March, and it is expected that Shanghai Lisboa has reached an important stage of turning losses into profits, driving strong profit growth. It is expected that the adjusted EBITDA profit margin in the first quarter will increase by 12 percentage points year on year, an increase of 2 percentage points on a quarterly basis.