Galaxy Ent 0027 / Lui Chee Woo

[winston]

not vested

GALAXY ENT(27)

Analysis：

For the six months ended 30 June 2022, net revenue amounted to HK$6.5 billion, representing a decrease of 39% YoY.

Adjusted EBITDA amounted to HK$ 191 million, representing a decrease of 90% YoY.

Net Loss Attributable to Shareholders of HK$850 million, versus profit of HK$947 million in 1H 2021.

The group successfully obtained a 10 year casino licenses renewal, eliminating uncertain factors.

In addition, over the past three years, the anti-epidemic policies have greatly reduced the number of visitors to Macau, causing a sharp drop in the revenue of gambling companies including Galaxy Entertainment.

However, we expect anti-epidemic policies will be relaxed slowly, which will benefit Galaxy Entertainment`s business recovery.

Strategy：
Buy-in Price: $43.05, Target Price: $48.00, Cut Loss Price: $39.00

Source: Phillips

[winston]

not vested

GALAXY ENT(27)

Analysis:

GEG operates three flagship destinations in Macau: Cotai, Galaxy Macau™, one of the world's largest integrated destinations resorts, and the adjoining Broadway Macau™, a unique landmark entertainment and food street destination; and on the Peninsula, StarWorld Hotel, an award-winning world-class five-star luxury hotel.

For the quarter ended 31 March 2023, the group revenue amounted to HKD 7.1 billion, increasing 72% YoY.

Net gaming revenue amounted to HKD 6.1 billion, increasing 79% YoY.

Among them, the mass market gaming revenue amounted to HKD 4.9 billion, increasing 86% YoY.

Normalized Adjusted EBITDA amounted to HKD 1.9 billion, increasing 223% YoY, and 47.4% of normalized Adjusted EBITDA in Q1 2019 (pre-pandemic).

According to preliminary statistics released by the Macau Tourism Office, the number of mainland tourists has recovered to nearly 60% before the epidemic, and the average number of daily inbound tourists last week reached 80,000, and the hotel occupancy rate was 89%.

We believed the arrival of the peak summer travel season is expected to drive a further recovery in mass gaming revenue.

Strategy：
Buy-in Price: $52.75, Target Price: $56.30, Cut Loss Price: $49.60

Source: Phillips

[winston]

not vested

Galaxy Entertainment Group (27 HK)
2Q23: EBITDA Misses; Expect Market Share Gains In 3Q23

Galaxy’s 2Q23 adjusted EBITDA was below consensus estimate.

However, in 3Q23, we expect the company to gain market share with new property openings,
as well as improved operating efficiency with permanent staff cost savings of >10%.

Its qtd mass GGR and drop were better than our expectations, +20% vs 2019’s level, in which
we expect the recovery momentum to continue as inbound visitations rise in the summer peak season.

Maintain BUY and revise up target price by 3% to HK$60.50.

Source: UOBKH

https://research.uobkayhian.com/content ... 31b818d2a4

[winston]

not vested

GALAXY ENT 3Q Adj. EBITDA Surges 5.76x YoY to $2.8B; Net Cash $23.3B

2023/11/09

GALAXY ENT (00027.HK) announced the financial results for the third quarter ended 30 September 2023.

The total net revenue of the period amounted to $9.65 billion, representing a YoY growth of 3.74 times and a QoQ uptick of 11.4%.

The adjusted EBITDA spiked 5.76 times YoY to $2.768 billion, as compared to the EBITDA loss of $581 million in the corresponding period of the previous year.

Dividend History
Announce Date Event Particular
2023/08/17 Interim SD:HKD 0.2
2023/08/17 Interim No Dividend
2023/02/23 Final No Dividend
2022/08/18 Interim No Dividend

The balance sheet of the group continued to be solid with total cash and liquid investments of $24.8 billion and net cash of $23.3 billion.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news

[winston]

vested

UOB Kay Hian Trims GALAXY ENT (00027.HK) TP to $57, Raises 2024 Opex Estimate

UOB Kay Hian issued a report, stating that GALAXY ENT (00027.HK)'s 3Q23 adjusted EBITDA grew 12% QoQ to $2.768 billion, equivalent to 67% of the same period in 2019 and 3% below the expectations of the broker and market.

On a luck normalized basis, adjusted EBITDA was $2.89 billion, 1% above the estimates of the broker and consensus.

In addition, UOB Kay Hian estimated that GALAXY ENT will incur higher operating expenses and reallocate gaming tables to Galaxy Macau, in order to meet growing demand in the fourth quarter.

Related News: HSBC Global Research Broadly Cuts TPs on MO Casinos, Upgrades MGM CHINA (02282.HK) to Buy

The broker raised its forecast on the company for 2024's operating expenses, lowering the EBITDA forecasts for 2024 and 2025 by 8% and 7%, but left its earnings forecasts for 2023 unchanged.

The broker was optimistic about GALAXY ENT's high-end mass positioning and strong net cash position.

Expecting that GALAXY ENT's non-gaming facilities will attract tourists in the coming quarters, UOB Kay Hian maintained the rating at Buy and cut the TP from $60.5 to $57.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news

[winston]

vested

<Research>M Stanley Downgrades GALAXY ENT (00027.HK) to Equal-weight, Reduces TP to $38

Morgan Stanley issued a research report on GALAXY ENT (00027.HK), chopping its target price from $46 to $38 and downgrading its rating from Overweight to Equal-weight.

According to the report, GALAXY's valuation premium comes from its track record of execution and the expansion of Galaxy Phases 3 and 4.

However, the recent reduction in market share is expected to trigger a downward revision of its earnings estimates and erosion of its premium.

Related News: JPM Downgrades GALAXY ENT (00027.HK) to Neutral, MELCO INT'L DEV (00200.HK) to Underweight

The broker cited three main reasons for the downgrade of GALAXY, including further negative earnings estimate revisions expected in 2024, predicted narrowing of valuation premium over its peers, and 1Q24 results likely being a negative catalyst.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

vested

<Research>HSBC Research: GALAXY ENT Casino Floor Renovation Completed Pre-CNY; Mkt Shr Trend to Be Improved in Coming Quarters

GALAXY ENT (00027.HK) lost market shares of premium mass market in November 2023 and January 2024, HSBC Global Research issued a research report saying.

The Group attributed the loss to the renovation of the casino floor, which brought the crowds to the southern part of the casino where it used to be quieter, the lack of hosts in the casino and the extremely low reinvestment rate.

Related News: M Stanley Downgrades GALAXY ENT (00027.HK) to Equal-weight, Reduces TP to $38

GALAXY ENT recently increased its marketing budget in order to provide its guests with offerings that is on par with its peers, according to the report.

With these changes, GALAXY ENT is working to gradually raise its market share in the coming quarters.

Some of the improvements have been recorded in February and March, with smart tables expected to be rolled out in 4Q24, which the Company believes will help to gradually enhance operational efficiency.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

not vested

Galaxy Entertainment Group (27 HK)
1Q24: Results Within Expectations; Launch Of Smart Gaming Tables In Jul 24

Galaxy reported in-line results.

The company’s market share decline reversed qtd, and current run rate exceeded the average market share in the past three and six months.

We stay cautiously optimistic on the company’s near-term margins due to gradual market share gains and stabilised operating expenses, while the significant efficiency benefits from implementing smart gaming tables should only be seen in early-25.

Maintain BUY but cut target price by 9% to HK$51.00.

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email

[winston]

vested

<Results>GALAXY ENT Interim NP Hikes 52% to $4.4B; Interim Div. Restarted at $0.5

Net profit hiked 51.8% YoY to $4.387 billion, giving an EPS of HK100.3 cents, while net revenue and adjusted EBITDA came in at $21.5 billion and $6.0 billion respectively, both up 37% YoY.

The group's net revenue for 2Q24 was $10.9 billion, rising 26% YoY and 3% QoQ.

GALAXY announced the opening of Capella at Galaxy Macau would be in the middle of next year.

As for Cotai Phase 3, the Company has continued to enhance the business of Galaxy International Convention Centre (GICC), Galaxy Arena, Raffles at Galaxy Macau and Andaz Macau.

The Group is working on the development of Cotai Phase 4, which will focus on non-gaming activities, mainly entertainment and family-friendly facilities.

Total cash and liquid investments of HK$29.0 billion and the net position was HK$25.2 billion after debt of HK$3.8 billion.

Source: aastocks.com

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

not vested

Galaxy Entertainment Group (27 HK)

2Q24: Continued Market Share Gain; Disciplined Cost Management; Higher Dividend Payout

Galaxy gained GGR market share in 2Q24 and 3Q24-to-date, and the share gaining momentum even accelerated in Aug 24-to-date.

The company continues to uphold the disciplined reinvestment principle, and expects staff costs to remain stable in the coming quarters.

Dividend payout ratio was raised to 50% (vs normal level of 30-33%), which we think is encouraging, and we do not rule out the possibility that it will maintain the higher payout ratio.

Maintain BUY with a lower target price of HK$48.00.

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email