HTSC·2026-03-25 00:45Investment Rating - The investment rating for MGM China is maintained as "Buy" with a target price of HKD 18.20 [2][9]. Core Insights - MGM China reported strong performance in its mid-to-high-end business, with a market share increase to 16.5% in Q4 2025 and 16.1% for the full year, marking a historical high [5]. - The company achieved operating revenue of HKD 96.2 billion for Q4 2025 and HKD 347.9 billion for the full year, reflecting a year-on-year increase of 21% and 10.8%, respectively [5]. - Adjusted EBITDA for Q4 2025 and the full year reached HKD 27.5 billion and HKD 100 billion, with year-on-year growth of 29% and 10.4% [5]. Financial Projections and Valuation - Revenue projections for MGM China are as follows: - 2025: HKD 34,788 million - 2026E: HKD 35,657 million (+2.31%) - 2027E: HKD 36,727 million (+3.83%) - 2028E: HKD 37,645 million (+3.30%) [4]. - Net profit attributable to the parent company is projected to be: - 2025: HKD 5,075 million - 2026E: HKD 5,242 million (+3.29%) - 2027E: HKD 5,399 million (+3.00%) - 2028E: HKD 5,571 million (+3.19%) [4]. - The expected PE ratio for 2026 is 7.86, and the expected dividend yield is 3.46% [4]. Business Performance - The mid-market gross gaming revenue (GGR) increased by 10.2% to HKD 315.1 billion, driven by strong betting volumes at MGM Cotai and MGM Macau [6]. - VIP GGR rose by 19.5% to HKD 48.4 billion, although there was a decline in VIP customer traffic and betting intentions [6]. - Slot machine revenue saw a slight increase of 3.3% to HKD 23.0 billion, despite a drop in overall win rates [6]. Strategic Initiatives - MGM China is deepening its "Tourism+" strategy to enhance brand loyalty among high-end customers, including the launch of new luxury offerings and entertainment projects [8]. - The company plans to leverage its parent company's global sales platform to accelerate the expansion of international customer sources [8]. Earnings Forecast Adjustments - The EBITDA forecast for 2026 and 2027 has been raised by 8% to HKD 97.3 billion and HKD 101.0 billion, respectively, with an introduction of a new EBITDA forecast for 2028 at HKD 103.5 billion [9].