Melco Resorts & Entertainment(US:MLCO) Ge Long Hui·2025-06-26 01:17Core Viewpoint - The company reported strong revenue growth driven by VIP and mass market gaming, but faced challenges with EBITDA margins due to aggressive customer acquisition strategies [1][2][3][4]. Group 1: Financial Performance - Melco Resorts (MLCO.US) reported Q2 2017 net revenue of $1.3 billion, a 20% year-over-year increase, exceeding the expected $1.24 billion [1]. - Property EBITDA was $330 million, a 76% year-over-year increase, but slightly below the expected $343 million [1]. - In Macau, VIP gaming revenue reached $641 million, a 56% year-over-year increase, while mass market revenue was $539 million, a 3% increase [1]. Group 2: Revenue Breakdown - The revenue from VIP gaming was $753 million, a 61% year-over-year increase, while mass market gaming revenue was $596 million, a 6% increase [1]. - Non-gaming revenue was $161 million, reflecting a 10% year-over-year growth [1]. - For the new Melco property, net revenue was $332 million, an 80% year-over-year increase, with EBITDA of $80.7 million, a 265% increase [2]. Group 3: Strategic Insights - The increase in VIP revenue was attributed to the addition of 33 VIP tables in November, enhancing the company's competitive position [3]. - The company is leveraging a unique movie-themed experience to attract customers, which aligns with consumer preferences for diverse entertainment options [3]. - Aggressive customer acquisition strategies have led to increased costs, impacting EBITDA margins, which fell from 30.8% in Q1 to 27.2% in Q2 [3]. Group 4: Future Outlook - The company is expected to benefit from the opening of the Morpheus hotel in April 2018 and the rebranding of the Hard Rock hotel, which will inject new vitality into operations [4]. - The company maintains a "buy" rating with target prices of HKD 25 and USD 28 for its shares, anticipating a narrowing of the discount relative to its subsidiaries [4].