Stock Track | MGM CHINA Plummets 11.55% Intraday as Brand Royalty Payments to Parent Company Set to Double

Stock Track2025-12-29

MGM CHINA (02282) saw its stock plummet by 11.55% during the Monday morning trading session, following an announcement that its brand royalty payments to parent company MGM Resorts International will double starting in 2026.

According to a Morgan Stanley research report, the royalty payments will increase from 1.75% to 3.5%, reaching HKD 1.2 billion in 2026, up from HKD 600 million projected for 2025. This change is expected to reduce MGM CHINA's corporate EBITDA by 7% compared to previous estimates, with the EBITDA margin narrowing by 220 basis points. The proportion of brand royalty fees to corporate EBITDA is projected to rise to 15.2%, raising concerns among investors.

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