Ge Long Hui·2025-12-29 08:07Core Viewpoint - MGM China (2282.HK) experienced a significant drop, with shares falling over 16% to HKD 13.05, marking a new low since June 2023 due to increased licensing fees to its parent company, MGM International [1] Company Summary - Morgan Stanley's report indicates that starting in 2026, the licensing fee paid by MGM China to MGM International will increase from 1.75% to 3.5% of monthly gross revenue [1] - The anticipated additional costs for MGM China are projected to reach HKD 1.2 billion annually, an increase of HKD 600 million compared to 2025 [1] - As a result of the fee hike, Morgan Stanley forecasts a 5% year-on-year decline in MGM China's EBITDA for 2026, with a contraction of 220 basis points in profit margins [1] Industry Summary - Despite the rising cost pressures from the licensing fee increase, Morgan Stanley maintains a constructive outlook on the Macau gaming sector, suggesting that the industry's fundamentals remain supportive [1]