CICC released a research report stating that maintaining the “neutral” rating of Aobo Holdings (00880), the 2024 EBITDA forecast was raised by 1% to HK$4.212 billion due to average midfielder increases driving the company's self-promotion casino performance to be better than expected. At the same time, the 2025 EBITDA forecast remains largely unchanged at HK$4.822 billion, with a target price of HK$3.3 billion.
The report cites Aobo's 1Q24 performance: the company's net revenue reached HK$6.92 billion, up 73% year on year, up 8% month on month, and recovered to 80% of 1Q19 level. The company has been adjusted
EBITDA was HK$864 million, up 2,687% year on year and 23% month-on-month, returning to 80% of 1Q19 level, slightly higher than Bloomberg's agreed forecast of HK$841 million. The bank believes that the company's better-than-expected performance is mainly due to an increase in the market share of Shanghai Lisboa Resorts, Grand Lisboa, and other self-promoted casinos.
The bank mentioned that during the May 1st holiday in 2024, the management mentioned that during the May 1st holiday in 2024, mid-time gaming revenue (including slots) of self-promoted casinos returned to 162% of the same period in 2019, up 42% year-on-year, and that the revenue of self-promoted casinos other than Lisboa (including slots) returned to 120% of the same period in 2019. The market share of Shanghai Lisboa Resorts reached 2.2% in April 2024, compared to 2% in 1Q24. Management believes that repairing the balance sheet is a higher priority than resuming dividends. Management expects to open nearly 10 additional casual restaurants and auditoriums (concert venues) in Upper Lisboa by early 2025.