By Amanda Lee
NagaCorp shares rose after the Cambodian casino operator reported stronger earnings on the back of a recovery in international and business travel.
Shares were up 6.9% to 3.71 Hong Kong dollars (US$0.47) at midday in Hong Kong Friday, lifting their year-to-date gain to 21%.
NagaCorp, which operates Phnom Penh's only integrated casino-and-hotel complex, said its first-quarter gross gaming revenue rose 24% compared with the same period a year earlier to US$145.4 million, while earnings before interest, tax, depreciation and amortization grew 33%.
Its average daily business volume in the mass market segment was the highest since it reopened its property in the third quarter of 2021, while volumes in its premium VIP segment exceeded pre-pandemic levels.
NagaCorp cited higher international tourist arrivals in Cambodia, and the continued return of business-related travelers "with longer repeated stays and higher spending power."
Citi analysts Ryan Cheung and George Choi said NagaCorp's Ebitda beat their forecast slightly, helped by a better-than-expected return from casino winnings that offset low numbers of visitors from China, which they said remained at about 27% of 2019's level.
They kept a sell rating on NagaCorp shares, however, citing expectations that NagaCorp stands to lose market share to regional rivals in coming years, and amid delays to its expansion project.
"We believe when the Mainland Chinese players return... they will likely return to other quality casinos with improved offerings in the region first," they wrote in a research note. The demise of Macau-based junkets means gaming volumes are unlikely to quickly recover to pre-pandemic levels, they added.
Citi has a share price target of HK$3.00 each.
Write to Amanda Lee at amanda.lee@wsj.com
(END) Dow Jones Newswires
April 05, 2024 00:26 ET (04:26 GMT)
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