SJM HOLDINGS(00880) 东吴证券国际·2024-11-15 09:14Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 3.0 [1] Core Views - The company's Q3 2024 performance exceeded expectations, with net revenue reaching HKD 7.5 billion, recovering to 91% of Q3 2019 levels [1] - Adjusted EBITDA for Q3 2024 was HKD 1.04 billion, surpassing the expected HKD 1.0 billion and recovering to 109.2% of Q3 2019 levels [1] - The company's market share in the gaming sector increased by 1.3 percentage points to 13.9% in Q3 2024 [1] - The new property, Grand Lisboa Palace, turned profitable in Q3 2024, contributing HKD 1.42 billion in gaming revenue, a 17.2% increase quarter-over-quarter [1] Financial Performance - Total revenue for 2023A was HKD 21,623.2 million, with a projected increase to HKD 28,921.2 million in 2024E, HKD 31,408.8 million in 2025E, and HKD 33,521.4 million in 2026E [1] - Adjusted property EBITDA for 2023A was HKD 1,928.0 million, expected to rise to HKD 3,786.5 million in 2024E, HKD 4,712.1 million in 2025E, and HKD 5,427.4 million in 2026E [1] - Earnings per share (EPS) for 2023A was -HKD 0.28, projected to improve to HKD 0.03 in 2024E, HKD 0.18 in 2025E, and HKD 0.31 in 2026E [1] Market Share and Operational Improvements - The company's market share in the VIP segment recovered to 26.9% of 2019 levels, while the mass market segment (including slot machines) recovered to 101.8% of 2019 levels [1] - Grand Lisboa Palace's adjusted property EBITDA reached HKD 165 million in Q3 2024, marking a turnaround from losses [1] - The company plans to enhance service quality by introducing new VIP programs, opening more leisure restaurants, and renovating the Sky Phoenix VIP area [1] Operational Costs - Daily operating expenses in Q3 2024 were approximately HKD 20.9 million, a 5.2% increase quarter-over-quarter, primarily due to higher summer traffic [1] - Grand Lisboa Palace's daily operating expenses were HKD 7.6 million, up 8.4% quarter-over-quarter, reflecting its growth phase and increased marketing personnel [1] Valuation Metrics - The company's EV/Adjusted EBITDA for 2024E is 11.7x, expected to decrease to 9.4x in 2025E and 8.2x in 2026E [1] - The current price-to-book (P/B) ratio is 1.41x, with a market capitalization of HKD 19.46 billion [2][3]