Jinwu Financial News | According to Dongwu Securities (Hong Kong) Research, Aobo Holdings (00880) announced first-quarter results. On the revenue side, 1Q24 achieved net revenue of HK$6.92 billion (basically in line with the agreed forecast of HK$6.85 billion), recovering to 68.2% of 1Q19. Net gaming/non-gaming revenue of HK$6.46/460 million, respectively, recovered to 76.3%/250.5% in the same period in 2019. On the profit side, 1Q24's adjusted EBITDA was HK$860 million, recovering to 80.4% of the same period in '19, slightly lower than the agreed estimate of HK$910 million. The main reason was the grand opening of the company Versace Hotel in March '24, which resulted in operating expenses of HK$58 million. The company included this in operating expenses, which had a negative impact on the adjusted EBITDA. If this one-time impact is excluded, the results are in line with expectations.
According to the bank, the average daily operating expenses of 1Q24 were about HK$20.4 million, an increase of 5.5% over the previous month. The main factors were: 1) affected by the one-time opening costs of Versace Hotel; 2) 20-30 new marketers were added in 1Q24. The average daily operating cost of a single property in Shanghai Lisboa was HK$6.7 million, an increase of 2.1% over the previous month, and the cost was well controlled. The company expects that when Lisboa reaches its target market share, the average daily operating expenses will be close to HK$8 million.
The bank raised the company's 2024-2026 net revenue forecast to HK$291.4/306.8/32.04 billion; raised the adjusted property EBITDA forecast to HK$40.5/46.7/4.97 billion; and the current stock price corresponding to 2024/2025/2026 EV/EBITDA by 11.3/9.8/9.3 times, respectively. The bank's target price is HK$3.6, maintaining a “buy” rating.