CICC Retains Outperform Rating on MGM China with HK$11 Target Price

Deep News10-31 21:40

CICC has released a research report maintaining its "Outperform" rating and HK$11 target price for MGM China (02282).

The company reported third-quarter net revenue of RMB 8.926 billion, up 5% year-on-year and 3% quarter-on-quarter, reaching 155% of the same period in 2019; adjusted EBITDA came in at RMB 2.395 billion, up 1% year-on-year and 3% quarter-on-quarter, also recovering to 155% of the same period in 2019, surpassing market expectations of RMB 2.297 billion, mainly driven by an increase in gaming revenue market share and solid profitability across business segments.

The bank noted that the company's market share reached 17.1% in the third quarter and further rose to 19.2% as of September, both hitting record highs. Despite overall industry weakness, the bank believes MGM China's strong market share trend is likely to continue into October and the fourth quarter.

CICC believes that the premium mass segment will continue to be the main growth driver for MGM China's performance. Following the opening of the Supreme area and the high-limit slot area at MGM Cotai, betting levels and gaming duration among premium customers have both increased. Contrary to industry trends, premium customer betting volume and visitation remain robust.

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