Financial Performance - Net revenue for the year ended December 31, 2024, was HKD 36.17 billion, an increase of HKD 6.64 billion or 22.5% compared to HKD 29.53 billion for the year ended December 31, 2023[2] - Adjusted EBITDA for the year ended December 31, 2024, was HKD 9.03 billion, up from HKD 7.51 billion for the year ended December 31, 2023[2] - Loss attributable to owners for the year ended December 31, 2024, was HKD 780 million, a significant improvement from a loss of HKD 1.74 billion for the year ended December 31, 2023[2] - Basic loss per share attributable to owners for the year ended December 31, 2024, was HKD 0.52, compared to HKD 1.16 for the year ended December 31, 2023[4] - The company reported a total comprehensive loss of HKD 1.51 billion for the year ended December 31, 2024, compared to HKD 3.44 billion for the year ended December 31, 2023[4] - The company reported a net loss of HKD 1,683,737,000 for the year ended December 31, 2024, compared to a net loss of HKD 3,494,121,000 in the previous year, showing an improvement of approximately 51.9%[24][25] - The total income tax expense for the year ended December 31, 2024, was HKD 48,561,000, compared to HKD 98,363,000 for 2023, reflecting a decrease of approximately 50.7%[6] - The company reported a loss attributable to owners of the company of HKD 784,603,000 for the year ended December 31, 2024, a significant improvement from a loss of HKD 1,743,932,000 in 2023, representing a reduction of approximately 55.0%[42] Assets and Liabilities - Total non-current assets as of December 31, 2024, were HKD 73.47 billion, down from HKD 76.68 billion as of December 31, 2023[5] - Current liabilities increased to HKD 18.65 billion as of December 31, 2024, from HKD 8.73 billion as of December 31, 2023[5] - Total equity as of December 31, 2024, was HKD 8.21 billion, a decrease from HKD 10.37 billion as of December 31, 2023[6] - Total assets as of December 31, 2024, amounted to HKD 84,749,503,000, with classified assets of HKD 84,629,880,000[27] - Total liabilities as of December 31, 2024, were HKD 76,542,982,000, with classified liabilities of HKD 71,361,571,000[27] - The company's equity attributable to owners dropped by 93.1%, from HKD 665.0 million in 2023 to HKD 45.9 million in 2024[90] Revenue Breakdown - The increase in net revenue was primarily driven by the recovery of inbound tourists to Macau and the gradual improvement in operations of new developments[2] - The gaming revenue for the year ended December 31, 2024, was HKD 29,432,330,000, up from HKD 24,090,362,000 in 2023, reflecting a growth of 22.0%[33] - Room revenue grew by 24.5% from HKD 2,647.6 million in 2023 to HKD 3,296.6 million in 2024[92] - Non-gaming revenue for City of Dreams Mediterranean and others reached $75,300,000 in 2024, up from $31,800,000 in 2023, marking a significant increase of 136.6%[112] - The total non-gaming revenue for Melco Resorts was $313,700,000 in 2024, compared to $243,700,000 in 2023, indicating a growth of 28.7%[108] Capital Expenditures and Investments - Capital expenditures for the year ended December 31, 2024, were HKD 2,042,744,000, compared to HKD 1,984,670,000 in 2023, reflecting a growth of 2.9%[30] - The company plans to implement significant capital expenditures for new projects in the coming years, seeking various financing methods[127] Debt and Financing - The company’s interest-bearing borrowings as of December 31, 2024, totaled HKD 60,687,698,000, a decrease of 4.4% from HKD 63,557,455,000 in 2023[47] - The company issued new interest-bearing borrowings of HKD 6,651,509,000 in 2024, down from HKD 9,811,171,000 in 2023, representing a decline of 32.5%[48] - The company repaid interest-bearing borrowings amounting to HKD 9,144,543,000 in 2024, a significant decrease of 50.0% compared to HKD 18,633,784,000 in 2023[48] - The group had available undrawn borrowing capacity totaling HKD 17,160,000,000 as of December 31, 2024, compared to HKD 8,250,000,000 in 2023, representing an increase of 107.0%[113] Operational Highlights - The group reported a strong recovery in tourism in Macau, with visitor numbers approaching 2019 levels, indicating a positive market trend[61] - The performance of City of Dreams Manila remained robust in 2024, benefiting from increased international visitor numbers and government support for tourism development[61] - The anticipated opening of City of Dreams Sri Lanka's casino in Q3 2025 is expected to enhance the brand and expand the customer base[63] - The return of the water show "The House of Dancing Water" in May 2025 is expected to elevate the cultural and artistic offerings in Macau[68] Corporate Governance and Social Responsibility - The company emphasizes the importance of high-quality performance and rewards based on performance, responsibilities, and contributions to the group's development[131] - The group won the "Best Overall Corporate Social Responsibility Program" and "Best Corporate Social Responsibility Initiative" at the IAG Academy IR Awards in 2024, reflecting its commitment to social responsibility[85] - The group was recognized as an "Industry Mover" in the 2025 S&P Global Sustainability Yearbook, indicating its progress in sustainable development within the gaming and entertainment sector[87] Employee and Training Initiatives - The total employee count increased to 21,795 as of December 31, 2024, up from 20,220 in 2023, with total employee costs amounting to HKD 6,972,000,000[128] - The company provides employee training to enhance performance and personal growth, aligning training goals with individual and company needs[132]

Investment Rating - The report maintains a "Buy" rating for the company [1][6] Core Views - The company's performance in Q4 2024 was below expectations, with adjusted property EBITDA margin declining by 3.6 percentage points. The net revenue for Q4 2024 was $1.19 billion, aligning with market expectations, and the overall recovery to 76.5% of Q4 2019 levels [6] - The company anticipates a gradual decrease in average daily operating expenses to $3 million in 1H25, following a peak of $3.2 million in Q4 2024 due to increased promotional activities and employee compensation [6] - The company expects to maintain its market share and has seen a 17% year-on-year increase in property foot traffic during the Chinese New Year period [6] Financial Forecasts and Valuation - The company forecasts total revenue of HKD 36.62 billion for 2024, with a year-on-year growth of 24%. Adjusted property EBITDA is projected at HKD 9.47 billion, reflecting a 26.2% increase [1][7] - The current stock price corresponds to EV/Adjusted EBITDA multiples of 7.2, 6.0, and 5.5 for 2024, 2025, and 2026, respectively [6][7] - The target price is set at HKD 6.6, with net income forecasts of HKD 36.62 billion, HKD 40.24 billion, and HKD 42.52 billion for 2024, 2025, and 2026 [6][7]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company's 3Q24 performance met expectations, with daily operating expenses remaining stable [1] - Total gaming revenue in 3Q24 reached USD 1.21 billion, recovering to 72.1% of 3Q19 levels [1] - Macau property gaming revenue was USD 1.01 billion, recovering to 66.4% of 2019 levels [1] - The company's recovery pace continues to lag behind the industry, with VIP/mass market share declining by 0.4pct/0.2pct respectively in 3Q24 [1] - Measures to attract high-quality customers have shown effectiveness, with mass market betting volume increasing over 20% during the National Day Golden Week [1] Financial Performance - 3Q24 net revenue was USD 1.18 billion, recovering to 81.7% of 3Q19 levels [2] - Gaming/non-gaming net revenue reached USD 940 million/USD 230 million, recovering to 76.0%/118.0% of 3Q19 levels respectively [2] - Adjusted property EBITDA was USD 320 million, recovering to 77.1% of 2019 levels [2] - Adjusted property EBITDA margin improved by 1.3pct to 27.4% in 3Q24 [2] Operational Outlook - Daily operating expenses are expected to remain around USD 3 million [3] - The "House of Dancing Water" show is expected to reopen in 2Q25, adding USD 100,000 to daily operating costs [3] - 4Q24 capital expenditure is estimated at USD 120 million, with 2025 capex projected at USD 400 million [3] - The Sri Lanka project, with 687 rooms opened in October 2024, is expected to open its gaming area in 2H25 [3] - Dividend resumption is anticipated in 2H25, subject to debt repayment progress [3] Financial Forecasts - 2024-2026 revenue forecasts are revised to HKD 36.62/40.24/42.52 billion [3] - Adjusted property EBITDA forecasts are revised to HKD 9.47/11.34/12.46 billion for 2024-2026 [3] - Current share price implies 2024/2025/2026 EV/EBITDA multiples of 7.3/6.1/5.6x [3] - Target price is revised to HKD 6.6 [3] Market Data - Current share price: HKD 4.95 [7] - 52-week range: HKD 3.83-6.95 [7] - Market capitalization: HKD 7.51 billion [7] - Price-to-book ratio: 24.9x [7]

Financial Performance - The group's net revenue for the six months ended June 30, 2024, was HKD 17,770,000,000, an increase of 36.3% compared to HKD 13,040,000,000 for the same period in 2023[4]. - The group reported a loss of HKD 443,600,000 for the six months ended June 30, 2024, significantly reduced from a loss of HKD 1,400,000,000 in the same period of 2023[4]. - The company's net revenue increased by 36.3% to HKD 17,765.6 million for the six months ended June 30, 2024, compared to HKD 13,038.4 million in the same period of 2023[25]. - Adjusted EBITDA rose by 40.2% to HKD 4,489.3 million for the six months ended June 30, 2024, from HKD 3,202.6 million in the previous year[27]. - The company reported a loss attributable to shareholders of HKD 253.2 million, a 65.5% improvement from a loss of HKD 733.2 million in the same period last year[28]. - The total comprehensive loss for the period was HKD 579,122,000, compared to a loss of HKD 1,556,816,000 in the previous year, showing an improvement[61]. - Basic and diluted loss per share for the period was HKD 0.17, compared to HKD 0.49 in the same period last year[61]. Operational Highlights - The opening of the Dolby Cinema at Studio City in June 2024 marks a significant investment in enhancing entertainment experiences[3]. - The group announced a strategic partnership with John Keells Holdings PLC to establish the first integrated resort in Sri Lanka, City of Dreams Sri Lanka, with a 20-year gaming license granted[3]. - The average operation for City of Dreams Manila included approximately 430 gaming tables and 624 gaming machines in the first half of 2024[5]. - Mocha Entertainment, the largest non-casino electronic gaming operation in Macau, averaged about 905 gaming machines in the first half of 2024[8]. - The average operation for Studio City included approximately 249 gaming tables and 656 gaming machines in the first half of 2024[6]. - City of Dreams Mediterranean opened in July 2023, becoming the largest integrated resort in Europe with 500 rooms and over 8,000 square meters of meeting space[10]. - In the first half of 2024, the average operation of gaming facilities in Cyprus included approximately 103 tables and 890 slot machines, while City of Dreams Mediterranean operated about 99 tables and 730 slot machines[10]. Guest Experience and Investments - The group continues to enhance guest experiences in Macau through significant investments in staff and property optimization[3]. - The flagship integrated resort, City of Dreams, aims to attract high-end travelers and is set to feature the return of the acclaimed show "The House of Dancing Water" in early 2025[5]. - The company is investing in diverse cultural tourism projects to support Macau's "1+4" diversification strategy, enhancing its position as a dynamic entertainment hub[12]. - The opening of the Marcos Baghdatis Tennis Academy at City of Dreams Mediterranean aims to provide a top-tier tennis experience, contributing to property optimization[11]. Tourism and Visitor Trends - Visitor numbers to Macau increased by 43.6% compared to the same period in 2023, reaching 82.4% of pre-pandemic levels from the first half of 2019[11]. - The Philippines saw a 13.7% increase in foreign tourist arrivals in the first half of 2024 compared to the previous year, indicating strong demand in the tourism market[12]. - Cyprus recorded over 1.65 million inbound tourists in the first half of 2024, a 2.4% increase from the same period in 2023[12]. Awards and Recognition - The company received multiple awards for excellence in corporate governance and investor relations, including being named "Best Investor Relations Company" for the 13th time in the Asia Excellence Awards[15]. - The group received 16 five-star honors in the 2024 Forbes Travel Guide, maintaining its leading position among integrated resort operators in Macau and Asia[16]. - The group’s properties, including City of Dreams and Studio City, won a total of eight stars in the 2024 Hong Kong and Macau Michelin Guide, with the Cantonese restaurant Yu Long Xuan receiving three Michelin stars for six consecutive years[17]. - The group was awarded the "2024 Best Learning Organization Award" by the Association for Talent Development (ATD) for the third consecutive year, recognizing its commitment to talent development[18]. Community Engagement and Sustainability - The group launched the "Small Dreams, Big Love" initiative to support local communities, including food donations of 500 food baskets to the Macau Caritas[20]. - The group organized the first "Business Exchange" event to support local SMEs, providing a platform for marketing and sales exposure[21]. - The "RISE" sustainability strategy led to the group receiving the Asia Sustainability Award for its commitment to integrating sustainability into business operations[22]. - City of Dreams Mediterranean won the "International Best Sustainable Business Development Project" and "European Best Sustainable Business Development Project" awards in 2024[22]. Financial Position and Liabilities - Total assets decreased by 3.3% to HKD 86,495.6 million as of June 30, 2024, compared to HKD 89,411.4 million at the end of 2023[24]. - Total liabilities also decreased by 3.0% to HKD 76,650.2 million as of June 30, 2024, from HKD 79,038.2 million[24]. - The company's cash and bank balances amounted to HKD 9,199,700,000, a decrease from HKD 10,765,500,000 as of December 31, 2023[45]. - The total available undrawn borrowing capacity as of June 30, 2024, was HKD 15,220,000,000, significantly increased from HKD 8,250,000,000 as of December 31, 2023[45]. - The capital-to-debt ratio as of June 30, 2024, was 71.2%, slightly up from 71.1% as of December 31, 2023[48]. - The group repaid a total of HKD 1,170,000,000 in principal and accrued interest under a credit facility agreement on March 28, 2024[46]. Employee and Operational Costs - As of June 30, 2024, the total number of employees in the group was 20,686, an increase from 19,676 as of June 30, 2023[55]. - Employee costs for the six months ended June 30, 2024, amounted to HKD 3,324,400,000, compared to HKD 2,991,700,000 for the same period in 2023, representing an increase of approximately 11.1%[55]. - Total operating costs and expenses for the six months ended June 30, 2024, were HKD 15,945,436,000, compared to HKD 12,403,304,000 in 2023, indicating an increase of about 28.5%[60]. Shareholder Information - The company has not declared an interim dividend for the six months ended June 30, 2024, consistent with the decision made in May 2020 to suspend the interim dividend plan[90]. - The total number of issued shares as of June 30, 2024, is 1,516,683,755 shares[167]. - Major shareholders holding 5% or more of the issued shares are recorded as of June 30, 2024[165]. Corporate Governance - The company has established various board committees to maintain high corporate governance standards[170]. - The company has complied with the corporate governance code as of June 30, 2024, except for certain deviations[170]. - Deloitte has been appointed as the new auditor of the company effective June 28, 2024, following the resignation of Ernst & Young[175].

Financial Performance - For the six months ended June 30, 2024, net revenue was HKD 17.77 billion, an increase of HKD 4.73 billion or 36.3% compared to HKD 13.04 billion for the same period in 2023, driven by the recovery of inbound tourist numbers in Macau[3]. - Adjusted EBITDA for the six months ended June 30, 2024, was HKD 4.49 billion, up from HKD 3.20 billion for the same period in 2023[3]. - The after-tax loss for the six months ended June 30, 2024, was HKD 440 million, significantly improved from a loss of HKD 1.40 billion for the same period in 2023[3]. - Basic loss per share attributable to owners for the six months ended June 30, 2024, was HKD 0.17, compared to HKD 0.49 for the same period in 2023[3]. - The company reported a loss attributable to owners of HKD 5,400,984,000 for the period ending June 30, 2024, compared to a loss of HKD 5,036,855,000 for the same period in 2023[10]. - The company reported a net loss of HKD 443,629 for the six months ended June 30, 2024, compared to a net loss of HKD 1,402,622 for the same period in 2023, indicating an improvement in performance[17][18]. - The company reported a loss attributable to shareholders of HKD 253,216,000 for the six months ended June 30, 2024, compared to a loss of HKD 733,248,000 for the same period in 2023, indicating a significant improvement[29]. Revenue and Expenses - The total operating costs and expenses for the six months ended June 30, 2024, were HKD 15.95 billion, compared to HKD 12.40 billion for the same period in 2023[4]. - The company recorded operating income of HKD 1.82 billion for the six months ended June 30, 2024, compared to HKD 635 million for the same period in 2023[4]. - Total revenue for the six months ended June 30, 2024, was HKD 17,765,628,000, a 36.1% increase from HKD 13,038,389,000 in the same period of 2023[21]. - Entertainment revenue reached HKD 14,516,622,000, up 35.5% from HKD 10,723,324,000 year-over-year[22]. - Customer contract revenue for the six months ended June 30, 2024, was HKD 17,543,106,000, compared to HKD 12,844,373,000 in the prior year, reflecting a 36.5% increase[23]. - Depreciation and amortization expenses totaled HKD 2,250,395,000 for the six months ended June 30, 2024, compared to HKD 2,099,709,000 in 2023, an increase of 7.2%[24]. Assets and Liabilities - Non-current assets as of June 30, 2024, totaled HKD 75.31 billion, a decrease from HKD 76.68 billion as of December 31, 2023[7]. - Current assets as of June 30, 2024, amounted to HKD 11.18 billion, down from HKD 12.73 billion as of December 31, 2023[7]. - The total assets as of June 30, 2024, amounted to HKD 86,495,623, a decrease from HKD 89,411,449 as of December 31, 2023, indicating a reduction of approximately 3.2%[19]. - The total liabilities as of June 30, 2024, were HKD 76,650,186, down from HKD 79,038,242 as of December 31, 2023, showing a decrease of about 3.0%[19]. - The company's equity as of June 30, 2024, was HKD 9,845,437,000, down from HKD 10,373,207,000 at the end of 2023[10]. - The total current liabilities amounted to HKD 16,317,284,000 as of June 30, 2024, significantly higher than the previous figure of HKD 8,726,114,000[10]. Cash and Borrowings - The company's cash and bank balances stood at HKD 9,199,738,000, with available undrawn borrowing capacity of HKD 15,217,857,000, subject to certain conditions[10]. - The total interest-bearing borrowings were HKD 61,566,991,000 as of June 30, 2024, down from HKD 63,557,455,000 as of December 31, 2023, showing a reduction in debt levels[35]. - The group's available undrawn borrowing capacity as of June 30, 2024, was HKD 15,217,857,000, up from HKD 8,246,959,000 as of December 31, 2023[43]. - The debt-to-capital ratio was 71.2% as of June 30, 2024, slightly up from 71.1% as of December 31, 2023[93]. Operational Highlights - The company operates integrated resort facilities in Asia and Europe, with significant investments in Macau and the Philippines[9]. - The company plans to continue expanding its operations in Macau and other jurisdictions, focusing on enhancing customer experience and service offerings[26]. - The group continues to maintain strong performance in its Philippine operations, particularly at City of Dreams Manila and City of Dreams Mediterranean in Cyprus[49]. - Macau's visitor numbers increased by 43.6% compared to the same period in 2023, reaching 82.4% of the pre-pandemic levels in the first half of 2019[58]. - The group is expanding globally with a partnership with John Keells Holdings PLC to develop Sri Lanka's first integrated resort, expected to open in Q4 2024, featuring hotels, restaurants, and banquet facilities[59]. Strategic Initiatives - The company continues to focus on environmental sustainability through its "RISE" strategy, which includes investments in renewable energy and sustainable practices[68]. - The company has actively supported local SMEs by organizing promotional events and training workshops to enhance their market presence and competitiveness[67]. - The group announced a strategic partnership with John Keells Holdings PLC to establish the first integrated resort in Sri Lanka, named City of Dreams Sri Lanka[49]. Employee and Governance - The total number of employees in the group was 20,686, an increase from 19,676 as of June 30, 2023[98]. - Employee costs for the six months ended June 30, 2024, amounted to HKD 3,324,400,000, compared to HKD 2,991,700,000 for the same period in 2023[98]. - The audit committee, consisting of three independent non-executive directors, reviewed the interim results for the six months ended June 30, 2024[102]. - Deloitte has been appointed as the new auditor following the resignation of Ernst & Young, effective June 28, 2024[104].

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company's total gaming revenue for Q2 2024 reached USD 1.21 billion, recovering to 74.5% of the level seen in Q2 2019. The Macau properties generated USD 1.05 billion, recovering to 69.6% of the same period in 2019 [2][3] - The company has taken measures to enhance liquidity, including debt extensions and bond issuances, resulting in a cash reserve of USD 670 million for Macau and USD 1.3 billion at the group level, sufficient to meet the USD 300 million refinancing requirement due in July next year [2] - The average daily operating expenses in Q2 2024 increased to USD 2.9 million, primarily due to new hires and a 2.5% salary increase. It is expected that the annual average operating expenses will return to approximately USD 3 million as events and shows resume [3] - The company's Q2 2024 net revenue was USD 1.16 billion, aligning closely with market expectations, and recovering to 80.4% of Q2 2019 levels. Adjusted EBITDA was USD 300 million, slightly below market expectations [3] - The report revises the company's net income forecasts for 2024-2026 to HKD 37.62 billion, HKD 41.06 billion, and HKD 42.95 billion, respectively, and adjusts the adjusted EBITDA forecasts to HKD 9.69 billion, HKD 11.74 billion, and HKD 12.62 billion [3] Financial Projections - Total revenue for 2023 is projected at HKD 29.53 billion, with expected growth rates of 179.5% in 2023, 27.4% in 2024, 9.1% in 2025, and 4.6% in 2026 [2][3] - The adjusted property EBITDA for 2023 is estimated at HKD 7.51 billion, with projections of HKD 9.69 billion in 2024, HKD 11.74 billion in 2025, and HKD 12.62 billion in 2026 [2][3] - The current stock price corresponds to EV/EBITDA multiples of 7.1, 5.9, and 5.5 for 2024, 2025, and 2026, respectively [3]

Investment Rating - The report maintains a "Buy" rating for Melco International Development with a target price of HKD 5.60, corresponding to a 2025 EV/EBITDA of 7.0x [6][8]. Core Insights - Melco's Q2 2024 net revenue was USD 1.16 billion, a 4.3% increase quarter-on-quarter, while adjusted property EBITDA was USD 303 million, up 1.3% quarter-on-quarter, recovering to 68% of Q2 2019 levels [2][8]. - The report predicts Melco's gaming gross revenue (GGR) for 2025 and 2026 to be HKD 36.991 billion and HKD 40.293 billion, respectively, recovering to 79% and 86% of 2019 levels [2][8]. - The report highlights that Melco's GGR recovery in Macau is lagging behind the industry average, with the company facing potential peak risks in its mid-market and slot machine segments [2][8]. Financial Projections - The projected operating revenue for Melco is expected to reach HKD 34.823 billion in 2024, HKD 38.400 billion in 2025, and HKD 42.344 billion in 2026, reflecting a growth rate of 17.9%, 10.3%, and 10.3% respectively [5]. - The adjusted net profit attributable to the parent company is forecasted to be HKD 1.014 billion in 2024, HKD 1.822 billion in 2025, and HKD 1.631 billion in 2026, indicating a significant recovery from previous losses [5]. - The report anticipates an EBITDA margin of 26.9% in 2025, slightly decreasing to 26.5% in 2026, compared to 27.8% in 2019 [8]. Market Performance - In Q2 2024, Melco's Macau GGR was USD 1.223 billion, recovering to 70% of Q2 2019 levels, compared to the industry average of 77% [2][8]. - The report notes that while the overall visitor numbers to Macau are increasing, Melco's performance in the VIP segment remains below industry standards, with VIP revenue recovering to only 25% of Q2 2019 levels [2][4]. - The report emphasizes that Melco's focus on non-gaming attractions, such as high-end dining and family-friendly entertainment, is crucial for its strategy to adapt to Macau's evolving market [3][8].

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company's total gaming revenue for Q1 2024 reached USD 1.19 billion, recovering to 74.7% of the level seen in Q1 2019. The Macau properties generated total gaming revenue of USD 1.01 billion, recovering to 72.1% of the same period in 2019 [2][3] - The company has actively adjusted its customer acquisition strategy by integrating the sales teams of its two Macau properties, which has led to improved performance. In March 2024, both properties achieved record high betting amounts, and the company's market share continued to increase in April 2024 [2] - The company plans to introduce RFID gaming tables in Q2 2024, with full implementation expected by Q2 2025, which is anticipated to boost overall gaming revenue [2] Financial Performance and Forecast - For Q1 2024, the company reported net revenue of USD 1.11 billion, aligning with Bloomberg consensus estimates, and recovering to 81.5% of Q1 2019 levels. Gaming and non-gaming net revenues were USD 0.91 billion and USD 0.20 billion, respectively [3] - The adjusted property EBITDA for Q1 2024 was USD 0.30 billion, also meeting expectations, and recovering to 72.2% of the same period in 2019. After standardizing for win rates, the adjusted property EBITDA increased to USD 0.33 billion, recovering to 87.3% of Q1 2019 levels [3] - The company expects daily operating expenses to rise to approximately USD 3 million in 2024, with capital expenditures projected at USD 420 million, including USD 50 million for a new project in Sri Lanka [3] Earnings Forecast and Valuation - The company’s net income forecasts for 2024-2026 have been adjusted to HKD 37.94 billion, HKD 40.87 billion, and HKD 42.74 billion, respectively. The adjusted property EBITDA forecasts are HKD 10.58 billion, HKD 12.26 billion, and HKD 13.06 billion for the same period [3] - The current stock price corresponds to EV/EBITDA multiples of 5.9, 5.1, and 4.8 for 2024, 2025, and 2026, respectively. The target price is set at HKD 7.6, maintaining the "Buy" rating [3]

Financial Performance - The group's net revenue increased by 179.5% year-on-year to HKD 29.53 billion, driven by the early lifting of COVID-19 restrictions in Macau and the openings of City of Dreams Mediterranean and the second phase of Studio City[13]. - Adjusted EBITDA rose to HKD 7.51 billion, compared to a negative adjusted EBITDA of HKD 362 million in 2022, indicating a significant recovery in operational performance[13]. - The group reported a loss of HKD 3.49 billion for the year, a substantial improvement from the loss of HKD 9.99 billion in 2022, reflecting the positive business momentum[13]. - The net revenue for the year ended December 31, 2023, was HKD 29.53 billion, a 179.5% increase compared to HKD 10.57 billion in the same period of 2022[23]. - The company reported a loss of HKD 3.49 billion for the year, significantly reduced from a loss of HKD 9.99 billion in 2022[23]. - The company's gaming revenue for 2023 reached HKD 24,090.4 million, a 185.9% increase from HKD 8,426.0 million in 2022[51]. - Adjusted EBITDA for the year ended December 31, 2023, was HKD 7,510 million, compared to a negative adjusted EBITDA of HKD 362 million in 2022[52]. - The net loss attributable to the company's owners for 2023 was HKD 1,740 million, significantly improved from a loss of HKD 5,110 million in 2022[53]. Expansion and Development - The opening of the City of Dreams Mediterranean in July 2023 marks a significant milestone in the group's expansion strategy, positioning Cyprus as a top tourist destination[6]. - The group is actively developing new concepts and strategies, including the construction of a Cineplex at Studio City and the anticipated return of the popular water show "The House of Dancing Water" by the end of 2024[13]. - The company has strategically launched a series of acclaimed experiences, including the indoor water park and the W Hotel in Macau, to attract high-end travelers[21]. - The flagship property, City of Dreams Mediterranean, opened in July 2023, featuring 500 rooms and over 8,000 square meters of meeting and exhibition space[32]. - The new indoor water park at Studio City opened in 2023, featuring multiple thrilling water slides and attractions, enhancing family entertainment options year-round[26]. Corporate Social Responsibility and Sustainability - The group has been recognized for its corporate social responsibility efforts, winning multiple awards including the "Best Overall Corporate Social Responsibility Program" at the 2023 IAG Academy IR Awards[14]. - The group aims to achieve its ambitious sustainability goals by 2030 through its "RISE" sustainability strategy, demonstrating a commitment to positive community impact[14]. - The company made over HKD 130,300,000 in donations and charitable contributions in 2023[16]. - The company aims to reduce waste and conserve water as part of its sustainability initiatives[17]. - The total greenhouse gas emissions increased from 17,688 MtCO2 in 2022 to 20,770 MtCO2 in 2023, reflecting a significant rise[18]. - Total energy consumption rose from 390,278 MWh in 2022 to 470,030 MWh in 2023[18]. - The total waste generated increased from 7,680 tons in 2022 to 15,633 tons in 2023, indicating a substantial increase in waste footprint[18]. - The company is committed to achieving carbon neutrality across its properties globally and implementing energy-saving measures[17]. - The company aims to achieve carbon neutrality and zero waste resorts by 2030, with progress updates provided to the board[157]. Governance and Leadership - The company has received multiple awards recognizing its leadership and contributions to the tourism industry, including the "Asian Best CEO" award in 2023[81]. - The company maintains a high level of corporate governance, focusing on responsible decision-making and improving transparency to shareholders[89]. - The corporate governance code has been established to guide and manage business affairs, ensuring compliance with the Hong Kong Stock Exchange's standards[90]. - The company has a written code of conduct to set ethical standards for all employees, ensuring the highest standards of integrity in business operations[91]. - The board of directors includes members with extensive experience in investment banking and corporate finance, contributing to informed decision-making[82][83]. - The company has established a governance policy for ESG matters to ensure sustainable operations and compliance with updated listing rules[145]. Employee Engagement and Diversity - The company believes that talent is key to its success and fosters a diverse and inclusive work environment, providing equal opportunities in all areas[80]. - The company has a structured approach to employee engagement, fostering a sense of belonging through recognition and participation[80]. - In 2023, 47% of the company's employees were women, with 17% of board members being female, reflecting a commitment to diversity and inclusion[161]. - The company aims to maintain at least 50% of management positions held by women by 2030[123]. - Employee training programs are systematically aligned with both personal and company needs, regularly reviewed for effectiveness[79]. Community Engagement - The company actively participates in community programs, contributing to the growth and future of the communities in which it operates[96]. - The company has initiated various community support programs, including charitable donations and volunteer activities, to address local needs and challenges[163]. - The company has strengthened cooperation with local businesses, creating economic opportunities for SMEs and micro-enterprises through various promotional events[164]. Risk Management - The Risk Management and Internal Control System aims to protect assets from misappropriation and unauthorized disposal, managing operational risks including environmental, social, and governance risks[134]. - The Audit Committee reviews the effectiveness of the risk management and internal control systems biannually[134]. - The company’s management is responsible for implementing strategies set by the board and ensuring cultural alignment across all levels[124]. Shareholder Engagement - The company encourages shareholder participation in the annual general meeting, aligning with corporate governance principles[150]. - The company’s articles of association allow shareholders to nominate candidates for the board at the annual general meeting, promoting shareholder involvement[148]. - Shareholders holding at least 5% of total voting rights can request the board to convene a meeting, ensuring their rights are protected[152].

Financial Performance - Net revenue for the year ended December 31, 2023, was HKD 29.53 billion, a 179.5% increase from HKD 10.57 billion in the previous year[3] - Adjusted EBITDA for the year ended December 31, 2023, was HKD 7.51 billion, compared to a negative HKD 362 million in the previous year[3] - Post-tax loss for the year ended December 31, 2023, was HKD 3.49 billion, a significant improvement from the HKD 9.99 billion loss in the previous year[3] - Basic loss per share attributable to the company's owners was HKD 1.16, compared to HKD 3.40 in the previous year[3] - Net asset value per share attributable to the company's owners was HKD 0.4 as of December 31, 2023, down from HKD 1.2 in the previous year[3] - The company reported a net loss of HKD 3.49 billion for 2023, an improvement from the net loss of HKD 9.99 billion in 2022[17][18] - Net revenue for 2023 was HKD 29,531.6 million, a year-on-year increase of 179.5%[80] - Adjusted EBITDA for 2023 was HKD 7,505.1 million, compared to a loss of HKD 362.0 million in 2022, representing a 2,173.4% improvement[80] - The company's attributable loss to owners was HKD 1,743.9 million, a 65.9% reduction compared to 2022[80] - Net revenue increased by 179.5% from HKD 10.57 billion in 2022 to HKD 29.53 billion in 2023, driven by the early relaxation of COVID-19 restrictions in Macau and the opening of City of Dreams Mediterranean and Studio City Phase 2[82] - Casino revenue surged by 185.9% to HKD 24.09 billion in 2023, compared to HKD 8.43 billion in 2022[83] - Adjusted EBITDA improved significantly to HKD 7.51 billion in 2023 from a negative HKD 362 million in 2022, primarily due to the relaxation of COVID-19 restrictions and the opening of Studio City Phase 2[84] - The company's attributable loss narrowed to HKD 1.74 billion in 2023 from HKD 5.11 billion in 2022, despite increased net interest expenses and impairment losses[85] Expenses and Costs - Gaming tax and license fees increased to HKD 11.66 billion from HKD 3.83 billion in the previous year[4] - Employee benefit expenses rose to HKD 6.17 billion from HKD 5.19 billion in the previous year[4] - Depreciation and amortization expenses decreased slightly to HKD 4.45 billion from HKD 4.59 billion in the previous year[4] - Operating costs and expenses for 2023 included depreciation and amortization of HKD 4.45 billion, share-based compensation of HKD 356.3 million, and pre-opening costs of HKD 327.9 million[17] - Non-operating expenses for 2023 included interest expenses of HKD 4.30 billion, other financing costs of HKD 38.0 million, and exchange gains of HKD 51.2 million[17] - The company's total non-operating expenses for 2023 were HKD 4.11 billion, compared to HKD 3.18 billion in 2022[17][18] - The company's income tax expense for 2023 was HKD 98.4 million, compared to HKD 5.6 million in 2022[17][18] - Impairment of non-financial assets increased from HK$568.25 million in 2022 to HK$1.11 billion in 2023, a growth of 96.0%[25] - Advertising and promotion expenses increased from HK$243.30 million in 2022 to HK$1.15 billion in 2023, a growth of 373.1%[25] - Employee-related costs for the year ended December 31, 2023, were HKD 6,171,200,000, up from HKD 5,187,000,000 in 2022[109] Assets and Liabilities - Total non-current assets as of December 31, 2023, were HKD 76.68 billion, down from HKD 79.79 billion in the previous year[6] - Cash and bank balances as of December 31, 2023, were HKD 10.77 billion, down from HKD 14.32 billion in the previous year[6] - Total current liabilities increased to 8,726,114 thousand HKD as of December 31, 2023, compared to 7,276,784 thousand HKD in 2022[7][8] - Net current assets decreased significantly to 4,003,439 thousand HKD in 2023 from 10,027,168 thousand HKD in 2022[8] - Total assets minus current liabilities stood at 80,685,335 thousand HKD as of December 31, 2023, down from 89,814,834 thousand HKD in 2022[8] - Non-current liabilities totaled 70,312,128 thousand HKD in 2023, a decrease from 76,428,769 thousand HKD in 2022[8] - The company's cash and bank balances amounted to 10,765,478 thousand HKD as of December 31, 2023, with unused borrowing capacity of 8,246,959 thousand HKD[11] - Total assets decreased from HK$97.09 billion in 2022 to HK$89.41 billion in 2023, a decline of 7.9%[19] - Total liabilities decreased from HK$83.71 billion in 2022 to HK$79.04 billion in 2023, a decline of 5.6%[19] - The company's equity attributable to owners decreased by 62.9% to HKD 665.0 million in 2023[81] - The company's total intangible assets and financial liabilities as of December 31, 2023, amounted to HKD 2,487,693,000, with a net book value of HKD 2,040,079,000[33] - The company's accumulated amortization of intangible assets as of December 31, 2023, was HKD 447,614,000[33] - Trade receivables as of 2023 amounted to HK$1,868,898,000, with HK$1,315,768,000 overdue by more than six months[42] - Trade payables as of 2023 totaled HK$91,807,000, with HK$58,397,000 due within one month[43] - Other payables, accrued expenses, and deposits received amounted to HK$7,982,093,000 in 2023, including HK$1,244,304,000 in gaming taxes and license fees[44] - Non-current liabilities included HK$2,203,552,000 in grants and license liabilities[45] - Total interest-bearing borrowings as of December 31, 2023, amounted to HKD 63,557,455,000, a decrease from HKD 72,211,007,000 in 2022[46] - New interest-bearing borrowings obtained in 2023 were HKD 9,811,171,000, compared to HKD 14,466,499,000 in 2022[47] - Repayments of interest-bearing borrowings in 2023 were HKD 18,633,784,000, significantly higher than HKD 215,474,000 in 2022[47] - Unsecured notes as of December 31, 2023, were HKD 47,496,913,000, slightly down from HKD 48,252,118,000 in 2022[46] - Unsecured bank loans decreased to HKD 8,222,000,000 in 2023 from HKD 14,831,845,000 in 2022[46] - Secured bank loans stood at HKD 5,135,975,000 in 2023, down from HKD 6,433,806,000 in 2022[46] - Fixed-rate borrowings were HKD 50,199,479,000 in 2023, compared to HKD 50,945,355,000 in 2022[46] - Floating-rate borrowings decreased to HKD 13,357,976,000 in 2023 from HKD 21,265,652,000 in 2022[46] - The company's borrowings denominated in USD were HKD 55,333,455,000 in 2023, down from HKD 63,780,960,000 in 2022[47] - The company repurchased USD 100,000,000 (approximately HKD 780,372,000) of 6.000% senior notes due 2025, resulting in a debt repayment gain of HKD 11,661,000[48] - The company secured a $1,000,000,000 five-year secured credit facility in 2021, consisting of a $688,000,000 term loan and a $312,000,000 revolving credit facility[51] - As of December 31, 2023, the outstanding principal amount of the restated 2021 credit facility was $658,600,000 (approximately HKD 5,144,830,000), down from $837,480,000 (approximately HKD 6,540,308,000) in 2022[53] - The company issued $350,000,000 (approximately HKD 2,733,499,000) of 7.00% senior secured notes due 2027, with net proceeds used for capital expenditures of Studio City's remaining development projects and general corporate purposes[53] - As of December 31, 2023, the company's total available and unused borrowing capacity was HKD 8,246,959,000, a significant increase from HKD 561,019,000 in 2022[54] - The company prepaid $165,120,000 (approximately HKD 1,296,147,000) of outstanding principal under the 2021 credit facility's term loan on April 26, 2023, resulting in a loss on debt modification of HKD 82,222,000 for the year ended December 31, 2023[52] - The interest rate for USD-denominated borrowings under the 2021 credit facility was revised to SOFR plus a credit spread adjustment of 0.06% and a margin of 2.35% per annum, effective June 19, 2023[52] - As of December 31, 2023, HKD 7,880,949,000 of the company's borrowings were secured by certain assets, down from HKD 9,275,637,000 in 2022[54] - The company extended the availability period of an unsecured credit facility of PHP 2,350,000,000 (approximately HKD 330,370,000) to April 30, 2024, with no material changes to terms and conditions[54] - The company's secured bank loans bear interest at HIBOR plus a margin ranging from 1.00% to 4.00% per annum or SOFR plus a credit spread adjustment of 0.06% and a margin of 2.35% per annum, denominated in HKD or USD[51] - The company received waivers for financial covenants under the 2020 credit facility for all relevant periods up to and including March 31, 2024[51] - The capital-to-debt ratio as of December 31, 2023, was 71.1%, a decrease from 74.4% in 2022[104] - The company repaid HKD 1,170,000,000 of outstanding principal under the 2020 credit facility along with accrued interest on March 28, 2024[103] - The total amount of loans secured by the company's assets as of December 31, 2023, was HKD 7,880,900,000, down from HKD 9,275,600,000 in 2022[104] - The company settled a tender offer for USD 100,000,000 (approximately HKD 780,400,000) of 2025 senior notes on November 28, 2023[103] - The company extended the availability period of an unsecured credit facility amounting to PHP 2,350,000,000 (approximately HKD 330,400,000) to April 30, 2024[103] Operations and Projects - City of Dreams Mediterranean, a new integrated resort in Cyprus, commenced operations in 2023 but has been negatively impacted by geopolitical conflicts[11] - The company implemented cost-cutting measures and rationalized capital expenditure plans to preserve cash[11] - The company believes it has sufficient resources to support operations and capital expenditures for at least the next 12 months[11] - The second phase of Studio City's expansion was completed in 2023, with the first stage opening in April and the second stage in September[11] - The company's operating segments are divided into "Casino and Hotel" and "Other," with segment performance evaluated based on Adjusted EBITDA, which excludes interest, taxes, depreciation, amortization, and other non-operating items[16] - The "Casino and Hotel" segment generated net revenue of HKD 29.55 billion in 2023, with Adjusted EBITDA of HKD 7.51 billion, compared to net revenue of HKD 10.57 billion and Adjusted EBITDA loss of HKD 356.8 million in 2022[17][18] - Total assets and liabilities are managed on a group basis, with deferred tax assets and liabilities, as well as other unallocated corporate assets and liabilities, excluded from segment reporting[16] - Net revenue from external customers in the casino and hotel segment increased from HK$6.71 billion in 2022 to HK$24.41 billion in 2023, a growth of 263.8% in Macau[22] - Non-current classified assets in Macau decreased from HK$71.88 billion in 2022 to HK$69.66 billion in 2023, a decline of 3.1%[22] - Capital expenditure in the casino and hotel segment decreased from HK$4.67 billion in 2022 to HK$1.98 billion in 2023, a decline of 57.6%[20] - Customer contract revenue increased from HK$10.22 billion in 2022 to HK$29.12 billion in 2023, a growth of 184.9%[24] - Rental income included in entertainment, retail, and other increased from HK$342.48 million in 2022 to HK$410.41 million in 2023, a growth of 19.8%[24] - Loss from joint ventures and associates decreased from HK$6.59 million in 2022 to HK$6.45 million in 2023, a decline of 2.1%[20] - The impairment of the cash-generating unit of Altira Macau was calculated based on the estimated recoverable amount of HKD 875,115,000 as of December 31, 2022, using a pre-tax discount rate of 14.11%[26] - The company's income tax expense for 2023 was HKD 98,363,000, compared to HKD 5,634,000 in 2022, with significant increases in Hong Kong profits tax and Macau supplementary tax on dividends[27] - Altira Macau was granted an extension of the exemption from Macau supplementary tax on gaming profits from January 1, 2023, to December 31, 2027[28] - Altira Macau entered into agreements with the Macau government for payments in lieu of Macau supplementary tax on dividends from gaming profits, totaling HKD 44,165,000 for 2023[29] - The company did not recommend any dividends for the years ended December 31, 2023, and 2022[30] - The company's basic and diluted loss per share attributable to owners was HKD 1,743,932,000 for 2023, compared to HKD 5,115,881,000 in 2022[31] - Intangible assets increased to HKD 19,357,150,000 in 2023 from HKD 17,319,114,000 in 2022, primarily due to gaming concessions and licenses[32] - The company confirmed intangible assets and financial liabilities of MOP 1,934,035,000 (approximately HKD 1,877,704,000) related to the use and operation rights of reversionary assets and the obligation to pay fixed and floating gaming premiums under the concession[35] - The company was granted a 10-year gaming concession by the Macau government, effective from January 1, 2023, to December 31, 2032, with an annual fixed gaming premium of MOP 30,000,000 (approximately HKD 29,126,000) and additional floating premiums based on the number and type of gaming tables and machines[34] - The company's gaming concession includes the operation of five entertainment venues in Macau, with a minimum requirement of 500 gaming tables and 1,000 gaming machines[34] - The company's intangible assets related to the gaming concession are amortized on a straight-line basis over the 10-year concession period[35] - The company's subsidiary in Cyprus was granted a 30-year gaming license, with an initial annual license fee of EUR 2,500,000 (approximately HKD 21,618,000) for the first four years, increasing to EUR 5,000,000 (approximately HKD 43,236,000) for the subsequent four years[36] - The Cyprus gaming license requires the opening of the City of Dreams Mediterranean by June 30, 2023, with the possibility of termination by the Cyprus government if this deadline is not met[36] - The company's gaming concession in Macau includes the transfer of reversionary assets from the Macau government, with concession fees ranging from MOP 750 (approximately HKD 730) per square meter for the first three years to MOP 2,500 (approximately HKD 2,400) per square meter for the remaining seven years[34] - The company recognized intangible assets of €68,031,000 (approximately HK$579,505,000) and financial liabilities of €67,