Goldman Sachs has released a research report indicating that MGM China (02282) second-quarter results met both the bank's and market expectations. The property EBITDA came in at HKD 2.33 billion, down 5% quarter-on-quarter, falling within the market forecast range of HKD 2.2 billion to HKD 2.4 billion.
Excluding the impact of VIP win rates below theoretical assumptions, the adjusted EBITDA was approximately HKD 2.35 billion, representing an 8% quarter-on-quarter decline and a 3% year-on-year decrease. The investment bank has slightly adjusted its EBITDA forecasts for MGM China for fiscal years 2026 to 2028, with changes of up to 1%, and has maintained a target price of HKD 16 with a "Buy" rating.
The broker cited management as stating that about two weeks after the conclusion of the World Cup, a strong release of pent-up demand was observed again. Visitor numbers and gaming volumes both saw a significant week-on-week recovery. Over the past week or two, industry daily gaming revenue has returned to levels seen in the first quarter, with MGM CHINA outperforming the broader market.
Goldman Sachs estimates that the industry's gross gaming revenue in July may approach MOP 21 billion, narrowing the year-on-year decline to 5% to 6%, compared to a 12% drop in June. The firm estimates that MGM CHINA's market share has rebounded to approximately 16.5% in July, up 1.1 percentage points sequentially, and expects the market share to range between 16% and 16.2% in the second half of the year. Assuming stable industry gaming revenue and promotional environment in the latter half, the bank expects quarterly property EBITDA to reach between HKD 2.44 billion and HKD 2.45 billion.
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