Financial Performance - MGM China Holdings Limited reported total revenue of HKD 31,387,155 thousand for the year ending December 31, 2024, an increase of 27.2% from HKD 24,684,210 thousand in 2023[3]. - The company's net profit attributable to shareholders rose to HKD 4,603,408 thousand, up 74.5% from HKD 2,638,304 thousand in the previous year[4]. - Adjusted EBITDA for the year was HKD 9,058,637 thousand, reflecting a growth of 25.2% compared to HKD 7,235,246 thousand in 2023[3]. - The basic earnings per share increased to HKD 1.211 from HKD 0.694, representing a growth of 74.5%[3]. - Total operating revenue for 2024 was HKD 31,387,155, up 27.1% from HKD 24,684,210 in 2023[22]. - The gaming segment generated revenue of HKD 27,282,911 in 2024, a 24.8% increase from HKD 21,821,840 in 2023[22]. - Casino revenue increased by 25.0% to HKD 27,282,911 thousand for the year ended December 31, 2024, compared to HKD 21,821,840 thousand in 2023[117]. - Main table gaming win increased by 33.6% to HKD 28,603,955 thousand, with betting amounts rising by 16.0% and 25.9% for MGM Macau and MGM Cotai, respectively[117]. Dividends and Shareholder Returns - The board proposed a final dividend of HKD 0.251 per share, totaling approximately HKD 953.8 million, which is about 20.7% of the net profit attributable to shareholders[5]. - The company declared a special dividend of HKD 0.353 per share, totaling HKD 1,341,900 thousand, paid on October 4, 2024[28]. - The company repurchased a total of 23,381,800 shares at a total cost of HKD 320.5 million for the year ending December 31, 2024[178]. - The repurchase aimed to maintain the same issued share capital and enhance the stability of the company's equity, thereby improving net asset value per share[179]. Assets and Liabilities - Total assets increased to HKD 30,603,648 thousand in 2024, compared to HKD 29,181,304 thousand in 2023, marking a growth of 4.9%[10]. - Total liabilities decreased slightly to HKD 30,076,121 thousand in 2024 from HKD 30,508,524 thousand in 2023[12]. - The company’s cash and cash equivalents rose to HKD 5,315,440 thousand, up from HKD 4,231,986 thousand in the previous year, indicating a 25.6% increase[10]. - The group has a net current liability of HKD 2,561,800 as of December 31, 2024, down from HKD 5,187,400 in 2023[14]. - Total borrowings decreased from HKD 24,098,731,000 in 2023 to HKD 22,919,939,000 in 2024, indicating improved debt management[44]. Operational Highlights - The company’s operating profit for the year was HKD 6,156,404 thousand, a 35.4% increase from HKD 4,547,486 thousand in 2023[3]. - The average daily win per main gaming table increased to HKD 107.3 in 2024 from HKD 92.0 in 2023, reflecting a growth in gaming performance[114]. - The occupancy rate for hotel rooms was 94.5% in 2024, up from 93.9% in 2023, indicating strong demand in the hospitality sector[114]. - The total win from main gaming tables at MGM Macau was HKD 12,158,127 in 2024, compared to HKD 9,866,398 in 2023, marking a significant increase[114]. - The total win from main gaming tables at MGM Cotai was HKD 16,445,828 in 2024, up from HKD 11,544,706 in 2023, showcasing robust growth[115]. Strategic Initiatives - MGM China Holdings Limited plans to continue expanding its operations following the easing of COVID-19 travel restrictions, which has positively impacted its financial performance[4]. - The company plans to continue expanding its operations in Macau, focusing on enhancing customer experience and service offerings[18]. - The company is focusing on developing new gaming technologies to enhance customer experience and operational efficiency[192]. - The company is actively identifying investment opportunities in innovative gaming and non-gaming facilities to diversify its service offerings[84]. - The company has expanded its international sales network to cities such as Kuala Lumpur, Manila, Seoul, and Osaka since 2023, aiming to further develop the international customer market[85]. Market and Industry Trends - The total number of inbound visitors to Macau increased by 23.8% compared to 2023, while the number of visitors from mainland China rose by 28.6%[88]. - Macau's gross gaming revenue for the year ending December 31, 2024, increased by 23.9% to HKD 220.2 billion compared to 2023[88]. - The company's overall market share in Macau's gaming sector reached 15.8% for the year ending December 31, 2024, up from 15.2% in 2023 and significantly higher than 9.5% before the COVID-19 pandemic[91]. - The company maintains an optimistic long-term growth outlook for the Macau market, supported by infrastructure improvements and increased travel demand from mainland China[89]. Compliance and Governance - The company has complied with all provisions of the corporate governance code as of December 31, 2024[181]. - The audit committee has reviewed the annual performance for the year ending December 31, 2024[184]. - The company has received approval for a tax exemption on profits generated from gaming operations in Macau for the period from January 1, 2023, to December 31, 2027[24]. Future Outlook - The company anticipates a positive outlook for the gaming industry in Macau, driven by increased tourism and consumer spending[192]. - The company is committed to enhancing customer experience through operational efficiency and quality service, focusing on the economic benefits of its properties in Macau[83]. - The company plans to launch the new Poly MGM Museum and the first resident show "Macau 2049" in 2024, enhancing its non-gaming product offerings[85].

Investment Rating - The report maintains a "Buy" rating for the company [1][5]. Core Insights - The company's revenue for the full year 2024 reached HKD 31.39 billion, representing a year-on-year growth of 27.2%. Adjusted EBITDA was HKD 9.06 billion, up 25.2% year-on-year, with an EBITDA margin of 28.9%, a slight decrease of 0.5 percentage points compared to the previous year [4][5]. - The company is expected to maintain a market share of approximately 15%, with projected revenues of HKD 33.4 billion and HKD 35.08 billion for 2025 and 2026, respectively, reflecting growth rates of 6.4% and 5.0% [5][7]. - The report highlights a steady growth in Q4 2024, with revenues of HKD 7.92 billion, a 3.2% increase year-on-year, and adjusted EBITDA of HKD 2.13 billion, a decrease of 2.9% year-on-year [5][4]. Financial Performance Summary - **Revenue**: - 2023A: HKD 24.68 billion - 2024E: HKD 31.39 billion (27.2% YoY growth) - 2025E: HKD 33.4 billion (6.4% YoY growth) - 2026E: HKD 35.08 billion (5.0% YoY growth) [7] - **Adjusted EBITDA**: - 2023A: HKD 7.24 billion - 2024E: HKD 9.06 billion (25.2% YoY growth) - 2025E: HKD 9.61 billion (6.1% YoY growth) - 2026E: HKD 10.1 billion (5.0% YoY growth) [7] - **Net Profit**: - 2023A: HKD 2.64 billion - 2024E: HKD 4.5 billion (70.6% YoY growth) - 2025E: HKD 5.35 billion (18.9% YoY growth) - 2026E: HKD 6.1 billion (14.1% YoY growth) [7] - **EBITDA Margin**: - 2023A: 29.3% - 2024E: 28.9% - 2025E: 28.8% - 2026E: 28.8% [7] - **Earnings Per Share (EPS)**: - 2023A: 69.4 HKD cents - 2024E: 118.5 HKD cents - 2025E: 140.8 HKD cents - 2026E: 160.6 HKD cents [7]

Investment Rating - The report maintains a "Buy" rating for MGM China [1] Core Views - The company's performance in Q4 2024 exceeded expectations, with total revenue reaching HKD 8.71 billion, a 10% increase quarter-on-quarter, and recovering to 128.3% of the same period in 2019 [6] - The company achieved a significant increase in market share, with VIP and mass market gaming revenue growing by 29.9% and 8.0% respectively, leading to an overall market share increase to approximately 15.6% [6] - The report forecasts continued growth in revenue and adjusted property EBITDA for 2024-2026, with target prices set at HKD 16.6 [6] Financial Projections - Total revenue is projected to grow from HKD 24,684.2 million in 2023 to HKD 31,381.9 million in 2024, representing a 369% year-on-year increase [1] - Adjusted property EBITDA is expected to rise from HKD 7,235.3 million in 2023 to HKD 9,244.1 million in 2024, reflecting a 28% increase [1] - The diluted earnings per share are forecasted to increase from HKD 0.69 in 2023 to HKD 1.34 in 2024 [1] Market Performance - The stock closed at HKD 9.71, with a market capitalization of HKD 36,899 million [4] - The stock has a historical price range of HKD 9.00 to HKD 14.92 over the past year [4] Balance Sheet Highlights - The total assets are projected to be HKD 29,181 million in 2023, with a significant portion in non-current assets [7] - The company has a debt ratio of 100.2%, indicating a high level of leverage [5]

Investment Rating - The report maintains a "Buy" rating for MGM China [6][7] Core Views - The company's performance in Q4 2024 exceeded expectations, with total revenue reaching HKD 79.2 billion, a 9.3% increase quarter-on-quarter, and a recovery to 139.1% of Q4 2019 levels [6] - The adjusted property EBITDA for Q4 2024 was HKD 21.3 billion, a 7.2% quarter-on-quarter increase, surpassing market expectations by 3% [6] - The company is expected to attract more inbound tourists due to the opening of "MGM 2049" and the renovation of suites, positively impacting revenue [6] Financial Forecasts and Valuation - Total revenue projections for 2024-2026 are HKD 31,381.9 million, HKD 33,635.5 million, and HKD 35,193.5 million respectively, with year-on-year growth rates of 27%, 7%, and 5% [6][7] - The adjusted property EBITDA forecasts for the same period are HKD 9,244.1 million, HKD 10,206.2 million, and HKD 10,850.7 million, with year-on-year growth rates of 28%, 10%, and 6% [6][7] - The current stock price corresponds to EV/adjusted property EBITDA multiples of 6.0, 5.4, and 5.1 for 2024-2026 [6][7]

Investment Rating - The report maintains a "Buy" rating for the company [5][10]. Core Insights - The company's overall performance in Q3 2024 met expectations, with strong growth in mass gaming and non-gaming segments, despite a slowdown in VIP segment recovery [5]. - Projected revenues for 2024, 2025, and 2026 are estimated at HKD 304.4 billion, HKD 323.1 billion, and HKD 339.7 billion, representing year-on-year growth of 23.3%, 6.1%, and 5.1% respectively [5]. - The company is expected to maintain a high dividend payout, with a projected dividend yield of 5.8% for 2024 based on a 50% payout ratio [5]. Financial Performance Summary - **Revenue**: - 2023A: HKD 246.8 billion - 2024E: HKD 304.4 billion (YoY growth: 23.3%) - 2025E: HKD 323.1 billion (YoY growth: 6.1%) - 2026E: HKD 339.7 billion (YoY growth: 5.1%) [4][5] - **EBITDA**: - 2023A: HKD 72.4 billion - 2024E: HKD 84.3 billion (YoY growth: 16.6%) - 2025E: HKD 87.2 billion (YoY growth: 3.4%) - 2026E: HKD 90.7 billion (YoY growth: 4.0%) [4][5] - **Net Profit**: - 2023A: HKD 26.4 billion - 2024E: HKD 41.9 billion (YoY growth: 58.6%) - 2025E: HKD 47.8 billion (YoY growth: 14.2%) - 2026E: HKD 54.1 billion (YoY growth: 13.2%) [4][5] - **Key Ratios**: - EBITDA Margin: - 2023A: 29.3% - 2024E: 27.7% - 2025E: 27.0% - 2026E: 26.7% [4][5] - Net Profit Margin: - 2023A: 10.7% - 2024E: 13.7% - 2025E: 14.8% - 2026E: 15.9% [4][5] Market Data - Closing Price (as of November 15, 2024): HKD 9.47 - Total Shares Outstanding: 3.801 billion - Total Market Capitalization: HKD 360 billion - Total Assets: HKD 300.35 billion - Total Liabilities: HKD 30.51 billion [2][4].

Investment Rating - The report maintains a "Buy" rating for MGM China (2282.HK) [1] Core Views - The company's revenue and profit continue to recover in Q3 2024, with a total revenue of HKD 7.25 billion, which is 125.5% of Q3 2019 levels, meeting market expectations [2] - The management has declared a special dividend of HKD 0.35 per share, reflecting confidence in the long-term prospects of the Macau business [3] - The report projects a decrease in net income forecasts for 2024-2026 to HKD 31.38 billion, HKD 33.64 billion, and HKD 35.19 billion respectively, with adjusted property EBITDA estimates lowered to HKD 9.24 billion, HKD 10.21 billion, and HKD 10.85 billion [3] Summary by Sections Revenue and Profitability - In Q3 2024, the company achieved total revenue of HKD 7.25 billion, recovering to 125.5% of Q3 2019 levels, with gaming revenue at HKD 6.24 billion (120.4% of Q3 2019) and non-gaming revenue at HKD 1.01 billion (168.2% of Q2 2019) [2] - The adjusted property EBITDA for Q3 2024 was HKD 1.98 billion, recovering to 128.1% of the same period in 2019, slightly below market expectations [2] Non-Gaming Business Development - The company's non-gaming initiatives are expected to enhance its competitiveness in the mid-market segment, with strong performance during the recent Golden Week, achieving 120% of 2019 visitor levels [2] - Upcoming projects, including the collaboration with director Zhang Yimou for the "MGM 2049" show and the new MGM Museum set to open in 2025, are anticipated to further boost visitor traffic [2] Market Position and Share - In Q3 2024, the company reported total gaming revenue of HKD 7.92 billion, recovering to 113.5% of 2019 levels, with VIP and mass market revenues at HKD 0.73 billion and HKD 7.19 billion respectively [3] - The company's market share for VIP and mass market segments saw a slight decline, with market shares of 5.7% and 17.4% respectively [3] Financial Forecasts - The report revises the net income forecasts for 2024-2026 to HKD 31.38 billion, HKD 33.64 billion, and HKD 35.19 billion, with adjusted property EBITDA forecasts lowered to HKD 9.24 billion, HKD 10.21 billion, and HKD 10.85 billion [3] - The current stock price corresponds to EV/adjusted property EBITDA multiples of 6.9, 6.2, and 5.9 for the years 2024, 2025, and 2026 respectively [3]

Financial Performance - Entertainment revenue for the first half of 2024 reached HKD 14,162,233, a significant increase from HKD 9,602,035 in 2023, representing a growth of 47.5%[5] - Adjusted EBITDA for the period was HKD 4,948,002, up from HKD 3,160,081 in the previous year, reflecting a year-on-year increase of 56.5%[5] - The operating profit for the first half of 2024 was HKD 3,522,333, compared to HKD 1,866,591 in 2023, marking an increase of 88.5%[5] - Profit attributable to owners of the company for the period was HKD 2,685,454, a substantial rise from HKD 820,914 in the same period last year, indicating a growth of 227.5%[5] - Basic earnings per share increased to HKD 0.706, compared to HKD 0.216 in 2023, reflecting a growth of 226.4%[5] - Operating revenue for the six months ended June 30, 2024, reached HKD 16,218.0 million, a 52.3% increase from HKD 10,649.4 million in the same period of 2023[27] - The adjusted EBITDA for the six months ended June 30, 2024, was HKD 4,948,002, an increase of 56.4% compared to HKD 3,160,081 for the same period in 2023[25] - The group reported a net profit attributable to the company’s owners of HKD 2,685 million for the six months ended June 30, 2024, compared to HKD 821 million for the same period in 2023, marking a significant increase of 227.5%[152] Market Presence and Strategy - MGM China Holdings Limited operates two major integrated resorts in Macau, MGM Macau and MGM Cotai, enhancing its market presence in the region[7] - The company focuses on a unique strategy targeting the mid-to-high-end market, aiming to provide diverse resort products including innovative entertainment and art attractions[10] - The company benefits from strong leadership and a well-experienced management team, enhancing its competitive advantages in the industry[10] - The company continues to identify innovative investment opportunities in both gaming and non-gaming facilities to strengthen its market position[11] - The company is optimistic about long-term growth in the Macau market due to significant financial investments and commitments made by six gaming operators over the new 10-year gaming license period[12] Visitor and Gaming Statistics - Total inbound visitors to Macau increased by 43.6% for the six months ended June 30, 2024, compared to the same period in 2023, while the number of visitors from mainland China rose by 52.9%[12] - Macau's gross gaming revenue for the six months ended June 30, 2024, increased by 41.9% to HKD 110.4 billion compared to the same period in 2023[12] - The company's overall gaming market share rose from 9.5% in 2019 to 15.2% in 2023, and further to 16.5% for the six months ended June 30, 2024[14] - The company's mass market gaming segment accounted for 87% of its gross gaming revenue for the six months ended June 30, 2024[15] Operational Efficiency and Customer Experience - The company is focusing on enhancing operational efficiency and customer experience through improved product and service quality, asset utilization, and operational efficiency across all business segments[11] - MGM China has enhanced customer experience by upgrading and expanding hotel, dining, and exhibition services, alongside significant marketing efforts to boost brand recognition[17] - The company is enhancing its gaming experience by renovating dedicated gaming areas for mid-to-high-end customers and reallocating VIP tables to maximize revenue[15] Financial Management and Investments - The company has committed to invest a total of MOP 19.7 billion (approximately HKD 19.1 billion) during the contract period, with MOP 18 billion (approximately HKD 17.5 billion) expected to be allocated to developing international customer markets and non-gaming projects, representing about 91% of the total investment[11] - The company issued USD 500 million of 7.125% senior notes due in 2031, with proceeds used to repay part of the outstanding amounts under the amended revolving credit facility[10] - The company has estimated potential litigation costs related to ongoing legal proceedings but believes they will not significantly impact its financial performance[60] Employee and Operational Costs - Employee costs rose by 28.0% to HKD 2.2795 billion, reflecting the hiring of additional staff to support increased business activities[44] - The company reported a significant increase in employee costs, which rose to HKD 2,279,459 thousand from HKD 1,780,149 thousand, marking a rise of 28.0%[137] - Other expenses and losses increased by 59.7% to HKD 1.6817 billion, driven by advertising and promotional expenses rising 110.1% to HKD 719.8 million[46] Shareholder Information and Dividends - The board has declared a special dividend of HKD 0.353 per share, totaling approximately HKD 1.341 billion, to be paid around October 4, 2024[85] - The company did not recommend an interim dividend for the six months ended June 30, 2024, based on its current financial position and future capital needs[85] - The special dividend should not be viewed as an indicator of future profits or dividend levels[85] Debt and Financing - Total borrowings as of June 30, 2024, amounted to HKD 23.7697 billion, a decrease from HKD 24.0987 billion as of December 31, 2023[61] - The company has no secured debt or subordinated debt as of the report date[66] - The company established an unsecured revolving credit facility totaling HKD 9.75 billion, maturing on May 15, 2024[68] - The company has an unused and available unsecured credit facility of HKD 11.08 billion as of June 30, 2024[68] Stock Options and Incentives - The company has adopted a comprehensive incentive plan allowing for the issuance of stock options and performance stock units, with a typical vesting period of four to five years[6] - The company maintains stock option plans from 2011 and 2020 to incentivize employees and directors contributing to the group's long-term growth[100] - The total number of stock options granted during the reporting period was zero for directors, while employees received various grants totaling 11,910,400 options[112] Compliance and Governance - The company has complied with the corporate governance code as per the listing rules during the six months from January 1, 2024, to June 30, 2024[133] - The company’s board of directors confirmed compliance with the securities trading code during the six months ending June 30, 2024[134]

Financial Performance - MGM China Holdings Limited reported operating revenue of HKD 16,217,982 for the six months ended June 30, 2024, an increase of 52.0% from HKD 10,649,439 in the same period of 2023[2]. - Adjusted EBITDA for the same period was HKD 4,948,002, up 56.5% from HKD 3,160,081 year-over-year[2]. - Net profit attributable to shareholders rose significantly from HKD 820,914 to HKD 2,685,454, marking a growth of 227.0%[3]. - Basic earnings per share increased to 70.6 HK cents, compared to 21.6 HK cents in the previous year, reflecting a growth of 227.6%[4]. - Operating profit for the six months ended June 30, 2024, was HKD 3.522 billion, compared to HKD 1.867 billion for the same period in 2023, indicating an increase of 88.5%[12]. - The group reported a profit attributable to owners of HKD 2.685 billion for the six months ended June 30, 2024, compared to HKD 820.914 million for the same period in 2023, representing a 227.5% increase[12]. - The company reported a profit attributable to shareholders of HKD 2,685,454,000 for the six months ended June 30, 2024, compared to HKD 820,914,000 for the same period in 2023, representing a significant increase[18]. - The company’s profit attributable to owners increased from HKD 820.9 million to HKD 2.685 billion, reflecting improved financial performance[83]. Assets and Liabilities - The total assets of the company as of June 30, 2024, were HKD 30,034,712, compared to HKD 29,181,304 at the end of 2023, indicating a growth of 2.9%[5]. - The total liabilities decreased slightly from HKD 30,508,524 at the end of 2023 to HKD 30,086,956 as of June 30, 2024[7]. - As of June 30, 2024, the group reported a net current liability of HKD 21.361 billion, a significant decrease from HKD 51.874 billion as of December 31, 2023[9]. - The company’s non-current assets totaled HKD 23,824,079, down from HKD 24,038,700 at the end of 2023, a decrease of 0.9%[5]. - The company’s total borrowings as of June 30, 2024, amounted to HKD 23,769,705,000, a slight decrease from HKD 24,098,731,000 as of December 31, 2023[23]. Cash Flow and Financing - Cash and cash equivalents increased to HKD 5,214,454 from HKD 4,231,986, representing a growth of 23.2%[5]. - Total cash and cash equivalents amounted to HKD 52.145 billion as of June 30, 2024, up from HKD 42.320 billion as of December 31, 2023[9]. - The group incurred total financing costs of HKD 838.550 million for the six months ended June 30, 2024, down from HKD 978.768 million in the same period of 2023[14]. - Net cash generated from operating activities was HKD 4.257 billion, up from HKD 3.692 billion, mainly due to increased operating profit[88]. - Major cash outflows for the six months ended June 30, 2024, included HKD 5.8731 billion for the repayment of notes, HKD 808 million for interest payments, and HKD 1.3196 billion for dividends[91]. Dividends - The company did not declare an interim dividend for the six months ended June 30, 2024[3]. - The board declared a special dividend of HKD 0.104 per share, totaling HKD 395,300,000, paid on April 23, 2024[17]. - The final dividend for the year ended December 31, 2023, was approved at HKD 0.243 per share, amounting to HKD 924,300,000, paid on June 20, 2024[17]. Market and Operational Insights - MGM China Holdings Limited continues to benefit from the easing of COVID-19 travel restrictions in Macau, contributing to improved operational performance[3]. - The total number of inbound visitors to Macau increased by 43.6% for the six months ended June 30, 2024, compared to the same period in 2023, while the number of visitors from mainland China rose by 52.9%[49]. - Macau's gross gaming revenue for the six months ended June 30, 2024, increased by 41.9% to HKD 110.4 billion compared to the same period in 2023[49]. - The overall gaming market share of MGM Grand increased from 9.5% in 2019 to 15.2% in 2023 and further to 16.5% for the six months ended June 30, 2024[51]. - The mid-market gaming business accounted for 87% of MGM Grand's gross gaming revenue for the six months ended June 30, 2024[52]. Investments and Future Plans - The company has committed to investments in gaming and non-gaming projects totaling MOP 16.7 billion (approximately HKD 16.2 billion), with MOP 15 billion (approximately HKD 14.6 billion) allocated to non-gaming projects[20]. - The company plans to launch two new gaming products in Q4 2024, aiming to capture a larger share of the market[127]. - The company is exploring potential acquisitions to enhance its portfolio and market reach, with a budget of up to $500 million allocated for this purpose[129]. - The company aims to enhance customer experience by improving product and service quality and increasing operational efficiency across all business segments[46]. Employee and Operational Metrics - The company employed 12,746 full-time and part-time employees as of June 30, 2024, an increase from 11,786 employees as of December 31, 2023[112]. - Employee costs increased by 28.0% to HKD 2.795 billion, primarily due to hiring additional staff to support business growth[76]. - The occupancy rate for hotel rooms was 94.1%, slightly up from 93.8% in 2023[65]. Corporate Governance and Compliance - The company has complied with the corporate governance code provisions during the reporting period from January 1, 2024, to June 30, 2024[116]. - The interim financial statements for the reporting period have been reviewed by the audit committee and the company's auditors[118]. - The company has adopted a more stringent code of conduct for securities trading by its directors and senior management, which has been adhered to during the reporting period[117].

Investment Rating and Target Price - Maintain Buy rating with a target price of HKD 16.1, corresponding to a 25-year EV/EBITDA of 7.5x [2] - The target price was revised down from HKD 18.0 due to potential peaking growth in Macau operations [9] Core Views - Macau operations (MGM China) reported Q2 2024 net revenue of USD 1.02 billion, up 37% YoY but down 4% QoQ [2] - Adjusted EBITDA for Q2 2024 was USD 310 million, up 40% YoY and down 2% QoQ, recovering to 168% of 2019 levels [2] - MGM China's Q2 2024 EBITDA margin was 30.7%, compared to 24.5% in Q2 2019 and 30.3% in Q1 2024 [2] - VIP revenue recovery is expected to reach 46%/48%/48% of 2019 levels in 2024/2025/2026, while mass market revenue is projected to recover to 170%/187%/196% [2] - MGM China's market share in Q2 2024 was approximately 15%, with expectations to maintain this level [4] Operational Performance - Q2 2024 gross gaming revenue (GGR) in Macau was USD 1.127 billion, recovering to 137% of Q2 2019 levels, outperforming the industry average of 77% [3] - VIP GGR in Q2 2024 was USD 113 million, recovering to 39% of Q2 2019 levels, while mass market GGR was USD 941 million, recovering to 205% [3] - Slot machine GGR in Q2 2024 was USD 74 million, recovering to 103% of Q2 2019 levels [3] - MGM Cotai reported Q2 2024 net revenue of USD 602 million with an EBITDA margin of 31.0%, while Macau MGM reported net revenue of USD 418 million with an EBITDA margin of 30.2% [3] Market and Industry Trends - Macau's total GGR in H1 2024 reached MOP 113.8 billion, exceeding half of the government's full-year target of MOP 216 billion [5] - Visitor arrivals to Macau in H1 2024 reached 16.72 million, recovering to 82.4% of 2019 levels, with mainland tourists being the primary driver [5] - Industry GGR is expected to recover to 79%/86% of 2019 levels in 2024/2025, reaching MOP 231 billion and MOP 252.1 billion respectively [5] Strategic Initiatives - MGM China is exploring the expansion of non-gaming services, including health and wellness offerings, to attract new and returning visitors [4] - The company plans to increase room capacity and enhance attractions such as the "MGM 2049" show by director Zhang Yimou [4] Financial Projections - Forecasted gaming revenue for 2024/2025/2026 is HKD 31.77 billion, HKD 34.65 billion, and HKD 36.22 billion, recovering to 118%/129%/135% of 2019 levels [2] - EBITDA for 2024/2025/2026 is projected at HKD 8.21 billion, HKD 8.97 billion, and HKD 9.38 billion, recovering to 81%/88%/92% of 2019 levels [9] - EPS for 2024/2025/2026 is forecasted at HKD 1.28, HKD 1.33, and HKD 1.36 [6]

Investment Rating - The report maintains a "Buy" rating for MGM China (2282.HK) [1] Core Views - The company's total gaming revenue for Q1 2024 reached HKD 9.45 billion, recovering to 140.8% of the same period in 2019, with VIP and mass market revenues at HKD 1.50 billion and HKD 7.95 billion respectively, recovering to 55.8% and 197.6% of 2019 levels [2][3] - The company's overall market share increased from 9.1% in Q1 2019 to 17.0% in Q1 2024, with a slight month-on-month increase in market share noted in March and April 2024 [2] - The adjusted property EBITDA for Q1 2024 was HKD 2.51 billion, exceeding Bloomberg consensus estimates by approximately 14%, and the EBITDA margin improved to 30.3% [3] Summary by Sections Revenue and Profit Forecast - Total revenue for 2023 is projected at HKD 24.68 billion, with a significant increase to HKD 33.40 billion in 2024, representing a year-on-year growth of 369% [2] - The adjusted property EBITDA is expected to rise from HKD 7.24 billion in 2023 to HKD 9.85 billion in 2024, reflecting a 117% increase [2] - The report forecasts earnings per share to increase from HKD 0.69 in 2023 to HKD 1.50 in 2024 [2] Business Expansion - MGM China is focusing on expanding its non-gaming business, including the addition of villas and suites in Macau and new dining services that have been well-received by consumers [3] - The company is collaborating with renowned director Zhang Yimou to create a resident show titled "MGM 2049" and is constructing a world-class museum in Macau to enhance cultural experiences for consumers [3] Market Position and Strategy - The management believes that the introduction of smart gaming tables by other operators will not significantly impact MGM China's competitive advantage, as the company has been utilizing smart tables since 2016 and has accumulated substantial consumer data [3] - The report projects that the company's adjusted property EBITDA margin will remain high, between 27% and 30%, throughout 2024 [3]