JPMorgan Downgrades MGM CHINA to "Neutral" on Expected Decline in Earnings and Dividend Payout

Stock News14:26

JPMorgan has issued a research report stating that MGM CHINA (02282) announced a final dividend of HK$0.35 per share, with a full-year dividend payout ratio of 50%, which is not poor given a dividend yield of 5.5%. However, peers have raised their payout ratios to an average of about 70%, increasing market expectations for MGM. Although the dividend payout ratio met expectations, the final dividend was approximately 10% lower than the bank's and market forecasts due to unexpectedly weak earnings per share. The report further noted that, more significantly, due to increased license fees, MGM CHINA's earnings per share for fiscal year 2026 are expected to decline by 11%, implying that the dividend payout ratio may fall further unless the company increases its payout ratio or issues a special dividend, which currently appears unlikely. JPMorgan has downgraded MGM CHINA's rating to "Neutral".

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