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<Research>CLSA: MO GGR Growth Slows; TPs for Casinos Cut; Top Picks GALAXY ENT/ SANDS CHINA LTD
Recommend 11 Positive 31 Negative 8 |
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Macau's 1Q25 GGR rose by 0.6% YoY to MOP56.7 billion, representing only 75% of the level in 1Q19, according to CLSA's research report. Despite a 10% YoY increase in Macau's visitor arrivals to 6.7 million in 2M25 (equivalent to 97% of the same period in 2019), the growth in GGR slowed. CLSA recommended investors to stick with operators with scale when industry valuations are undemanding, with GALAXY ENT (00027.HK) and SANDS CHINA LTD (01928.HK) being its top picks. The broker noted that GALAXY ENT's net cash accounts for 22% of its current market capitalization, and believed that its strategy for defending its market share through entertainment events in the slack season will continue to bear fruit in 2025. CLSA liked SANDS CHINA LTD on earnings growth from the full completion of the Londoner Phase 2 project, which is expected to be completed before the May Golden Week in 2025, and anticipated the stock to expand its revenue market share from 2Q25 onwards. Therefore, CLSA cut its target prices for casinos, and chopped its target price target on GALAXY ENT from $46 to $38.9, with rating kept at Outperform. The broker also trimmed its target price for SANDS CHINA LTD from $24.9 to $18.7, with rating kept at Outperform. AAStocks Financial News |
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