MGM CHINA(02282) 东吴证券国际·2024-11-08 06:30Investment 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]