<Research>CLSA: February GGR Exceeds Expectations; Preferred Stocks GALAXY ENTERTAINMENT and MGM CHINA
Macau's GGR Performance: Macau's Gross Gaming Revenue (GGR) for February rose by 4.5% year-on-year to MOP20.6 billion, exceeding market expectations of 1% growth, driven by strong demand towards the end of the month.
Market Analysis: The gaming sector in Macau is currently valued at 10.1 times the projected 2026 EV/EBITDA, with GALAXY ENT and MGM CHINA identified as top picks by CLSA, despite recent short selling activity.
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<Full-day Summary> HSI Falls 570 Points; HSTI Declines 148 Points; XIAOMI Drops More Than 5%; MEITUAN Decreases Over 4%; BABA Falls Over 4%; XINYI GLASS, CNOOC, PETROCHINA, OOIL, and CHINA SHENHUA Reach New Highs; Market Turnover Increases
Market Performance: The Hang Seng Index (HSI) fell by 570 points (2.1%) to 26,059, while the Hang Seng Tech Index (HSTI) dropped 148 points (2.9%) to 4,989, with a total market turnover of $357.68 billion.
Declining Heavyweights: Major stocks like Xiaomi, Meituan, and Alibaba experienced significant declines, with Xiaomi down 5% and Alibaba down 4.5%, amidst high short selling ratios.
Gainers in the Market: Xinyi Glass and CNOOC were notable gainers, with Xinyi Glass rising 12.4% to a new high, while CNOOC increased by 5.6%.
Volatile Stocks: Several stocks faced sharp declines, including Guofuhee, which plummeted 19.2%, and Dmall, which fell 13.1%, indicating a volatile trading environment.
JPM Suggests Focused Investment Strategy, Identifies GALAXY ENT as Preferred Choice; February GGR Exceeds Expectations
Macau's GGR Performance: Macau's gross gaming revenue (GGR) for February increased by 4% year-on-year to MOP20.6 billion, exceeding market expectations, with a notable surge in the last week of February driven by high-end customer demand.
Investor Recommendations: JPMorgan advised investors to be selective, favoring GALAXY ENT with a target price of HKD52, while rating SJM HOLDINGS and MELCO INTERNATIONAL DEVELOPMENT as Underweight with lower target prices.
<Research>CLSA: February GGR Exceeds Expectations; Preferred Stocks GALAXY ENTERTAINMENT and MGM CHINA
Macau's GGR Performance: Macau's Gross Gaming Revenue (GGR) for February rose by 4.5% year-on-year to MOP20.6 billion, exceeding market expectations of 1% growth, driven by strong demand towards the end of the month.
Market Analysis: The gaming sector in Macau is currently valued at 10.1 times the projected 2026 EV/EBITDA, with GALAXY ENT and MGM CHINA identified as top picks by CLSA, despite recent short selling activity.
CLSA Projects March GGR in Macau to Increase 9.7% Year-on-Year to MOP21.6 Billion
Macau's GGR Performance: Macau's Gross Gaming Revenue (GGR) for February increased by 4.5% year-on-year to MOP20.6 billion, surpassing a downgraded market forecast of 1% but falling short of CLSA's expectation of 7.4%.
Strong End to February: Despite a weak performance in mid-February, GGR showed a strong average of MOP1.053 billion from February 23 to 28, indicating a positive outlook for March.
March GGR Forecast: CLSA anticipates a 9.7% year-on-year growth in Macau's GGR for March, projecting it to reach MOP21.6 billion, although this is 3% lower than market expectations.
Top Stock Picks: CLSA identifies Galaxy Entertainment and MGM China as its top stock picks, with notable short selling activity reported for both companies.
JPM Projects Future Dividend Increases for GALAXY ENT (00027.HK), Maintains Overweight Rating as Preferred Choice
Annual Results Announcement: GALAXY ENT reported its annual results for FY2025, with 4Q25 results surpassing market expectations, a market share increase of 160 bps QoQ to 21.7%, and a profit growth of 29% QoQ.
Dividend Performance: The final dividend per share (DPS) of $0.8 reflects a 61% payout ratio for FY2025, meeting broker estimates but disappointing some investors hoping for a higher return.
Analyst Ratings: JPMorgan maintained an Overweight rating for GALAXY ENT, designating it as a top pick with a target price of $52, while expressing a selective outlook on the gaming sector.
Future Expectations: There are expectations for gradual dividend increases, with potential positive developments anticipated in the interim results for FY2026, set to be announced in August.
G Sachs Anticipates GALAXY ENT Will Have Sufficient Financial Resources for Dividend Increase, but Lowers Price Target to $53.4
Financial Performance: Goldman Sachs reported that GALAXY ENT achieved strong 4Q25 results with EBITDA growth of 29% QoQ to HKD4.3 billion, aligning with expectations and the upper end of consensus estimates.
Dividend Policy: The company declared a final DPS of HKD0.8 for 2H25, increasing its earnings payout to 64%, with management indicating plans to maintain a minimum 65% payout in the future.
Future Outlook: Goldman Sachs believes GALAXY ENT has sufficient financial capacity to increase dividends or adopt a progressive dividend policy, supported by strong free cash flow and substantial net cash reserves.
Market Impact: The upcoming "Two Sessions" from March 4 to 11 may influence gaming and tourism demand, leading Goldman Sachs to slightly adjust its EBITDA forecasts for FY26-27 and lower the 12-month target price from HKD54 to HKD53.4 while maintaining a Buy rating.
<Full-day Summary> HSI Falls 570 Points; HSTI Declines 148 Points; XIAOMI Drops More Than 5%; MEITUAN Decreases Over 4%; BABA Falls Over 4%; XINYI GLASS, CNOOC, PETROCHINA, OOIL, and CHINA SHENHUA Reach New Highs; Market Turnover Increases
Market Performance: The Hang Seng Index (HSI) fell by 570 points (2.1%) to 26,059, while the Hang Seng Tech Index (HSTI) dropped 148 points (2.9%) to 4,989, with a total market turnover of $357.68 billion.
Declining Heavyweights: Major stocks like Xiaomi, Meituan, and Alibaba experienced significant declines, with Xiaomi down 5% and Alibaba down 4.5%, amidst high short selling ratios.
Gainers in the Market: Xinyi Glass and CNOOC were notable gainers, with Xinyi Glass rising 12.4% to a new high, while CNOOC increased by 5.6%.
Volatile Stocks: Several stocks faced sharp declines, including Guofuhee, which plummeted 19.2%, and Dmall, which fell 13.1%, indicating a volatile trading environment.
JPM Suggests Focused Investment Strategy, Identifies GALAXY ENT as Preferred Choice; February GGR Exceeds Expectations
Macau's GGR Performance: Macau's gross gaming revenue (GGR) for February increased by 4% year-on-year to MOP20.6 billion, exceeding market expectations, with a notable surge in the last week of February driven by high-end customer demand.
Investor Recommendations: JPMorgan advised investors to be selective, favoring GALAXY ENT with a target price of HKD52, while rating SJM HOLDINGS and MELCO INTERNATIONAL DEVELOPMENT as Underweight with lower target prices.
<Research>CLSA: February GGR Exceeds Expectations; Preferred Stocks GALAXY ENTERTAINMENT and MGM CHINA
Macau's GGR Performance: Macau's Gross Gaming Revenue (GGR) for February rose by 4.5% year-on-year to MOP20.6 billion, exceeding market expectations of 1% growth, driven by strong demand towards the end of the month.
Market Analysis: The gaming sector in Macau is currently valued at 10.1 times the projected 2026 EV/EBITDA, with GALAXY ENT and MGM CHINA identified as top picks by CLSA, despite recent short selling activity.
CLSA Projects March GGR in Macau to Increase 9.7% Year-on-Year to MOP21.6 Billion
Macau's GGR Performance: Macau's Gross Gaming Revenue (GGR) for February increased by 4.5% year-on-year to MOP20.6 billion, surpassing a downgraded market forecast of 1% but falling short of CLSA's expectation of 7.4%.
Strong End to February: Despite a weak performance in mid-February, GGR showed a strong average of MOP1.053 billion from February 23 to 28, indicating a positive outlook for March.
March GGR Forecast: CLSA anticipates a 9.7% year-on-year growth in Macau's GGR for March, projecting it to reach MOP21.6 billion, although this is 3% lower than market expectations.
Top Stock Picks: CLSA identifies Galaxy Entertainment and MGM China as its top stock picks, with notable short selling activity reported for both companies.
JPM Projects Future Dividend Increases for GALAXY ENT (00027.HK), Maintains Overweight Rating as Preferred Choice
Annual Results Announcement: GALAXY ENT reported its annual results for FY2025, with 4Q25 results surpassing market expectations, a market share increase of 160 bps QoQ to 21.7%, and a profit growth of 29% QoQ.
Dividend Performance: The final dividend per share (DPS) of $0.8 reflects a 61% payout ratio for FY2025, meeting broker estimates but disappointing some investors hoping for a higher return.
Analyst Ratings: JPMorgan maintained an Overweight rating for GALAXY ENT, designating it as a top pick with a target price of $52, while expressing a selective outlook on the gaming sector.
Future Expectations: There are expectations for gradual dividend increases, with potential positive developments anticipated in the interim results for FY2026, set to be announced in August.
G Sachs Anticipates GALAXY ENT Will Have Sufficient Financial Resources for Dividend Increase, but Lowers Price Target to $53.4
Financial Performance: Goldman Sachs reported that GALAXY ENT achieved strong 4Q25 results with EBITDA growth of 29% QoQ to HKD4.3 billion, aligning with expectations and the upper end of consensus estimates.
Dividend Policy: The company declared a final DPS of HKD0.8 for 2H25, increasing its earnings payout to 64%, with management indicating plans to maintain a minimum 65% payout in the future.
Future Outlook: Goldman Sachs believes GALAXY ENT has sufficient financial capacity to increase dividends or adopt a progressive dividend policy, supported by strong free cash flow and substantial net cash reserves.
Market Impact: The upcoming "Two Sessions" from March 4 to 11 may influence gaming and tourism demand, leading Goldman Sachs to slightly adjust its EBITDA forecasts for FY26-27 and lower the 12-month target price from HKD54 to HKD53.4 while maintaining a Buy rating.
