Zhi Tong Cai Jing·2026-02-09 01:53Core Viewpoint - CICC maintains its EBITDA forecast for MGM China (02282) for 2026 and 2027, with the current stock price corresponding to 6x 2026e EV/EBITDA. The firm maintains an "outperform" rating and a target price of HKD 16.10, which corresponds to 8x 2026e EV/EBITDA, indicating a 23% upside potential from the current stock price [1] Group 1 - In Q4 2025, adjusted EBITDA exceeded Visible Alpha consensus expectations, with net revenue reaching HKD 9.617 billion, a year-on-year increase of 21% and a quarter-on-quarter increase of 13%, recovering to 169% of Q4 2019 levels [2] - Adjusted EBITDA for Q4 2025 was HKD 2.753 billion, a year-on-year increase of 29% and a quarter-on-quarter increase of 16%, recovering to 177% of Q4 2019 levels, surpassing Visible Alpha's consensus estimate of HKD 2.449 billion [2] - The strong performance of MGM China is attributed to the continued outperformance of its premium business, with MGM Cotai and MGM Macau's total gaming revenue recovering to 214% and 104% of Q4 2019 levels, respectively [2] Group 2 - In Q4 2025, MGM China signed a new long-term brand agreement with MGM Resorts, increasing the brand usage fee from 1.75% to 3.5% of monthly net revenue, effective from 2026 for a 20-year term, with an annual payment cap set to increase gradually [2] - The annual cap for brand usage fees in 2026 is set at USD 188 million, compared to USD 60 million in 2025, with the economic benefits of the new fee structure allocated 66.7% to MGM Resorts and 33.3% to Ms. Pansy Ho [2] - The new brand fee structure is expected to have a significant negative impact on the company's net profit, potentially dragging down CICC's net profit forecast by approximately 14% [2] Group 3 - Management indicated strong hotel booking performance for the 2026 Spring Festival holiday starting February 17, 2026, with stable business performance leading up to the holiday [3]