CISI FIN released a research report initiating coverage on GALAXY ENT (00027) with a "Buy" rating. The company's mid-to-high-end strategy has proven effective, with its cumulative market share from Q1 to Q3 2025 showing year-on-year growth. The Galaxy Arena has hosted multiple large-scale international entertainment events, attracting and converting tourist traffic, while the opening of the high-end Capella property has brought synergies.
GALAXY ENT's Phase 4 development, a rare new supply in Macau, is currently under construction and expected to be completed and open in phases by 2027, potentially contributing to the next growth driver. The report highlights the company's scale advantage, supply potential, mid-to-high-end customer loyalty, stable operational management, and industry-leading financial strength.
Key takeaways from CISI FIN's report include: 1. **Strong Q3 2025 Performance**: Net revenue reached HKD 12.2 billion, up 14% YoY and 1% QoQ. Adjusted EBITDA stood at HKD 3.3 billion, up 14% YoY but down 6% QoQ due to win rate fluctuations. Normalized win rates would have led to a 5% QoQ increase in EBITDA. 2. **High Dividend Payout**: The company declared an interim dividend of HKD 0.7 per share, representing a 58% payout ratio, with an expected 2025E dividend yield of 3.5%. 3. **Betting Volume & Win Rate Growth**: VIP, mass market, and slot machine betting volumes rose 46%, 12%, and 3% YoY respectively in Q3 2025, despite typhoon-related disruptions. Win rates improved due to smart tables and innovative gaming offerings. 4. **Market Share Expansion**: GALAXY ENT's GGR grew 20.6% YoY in Q3 2025, outperforming the industry average (12.5%). Its cumulative market share for the first three quarters reached 19.4%, up YoY.
Risks include intensified competition, weaker consumer spending, and regulatory changes.
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