MGM CHINA(02282) 东吴证券国际·2024-02-20 16:00Investment Rating - The report maintains a "Buy" rating for MGM China (2282 HK) [1] Core Views - MGM China's 4Q23 revenue and profits exceeded expectations, with total revenue reaching HKD 7 68 billion (134 9% of 4Q19 levels) and adjusted property EBITDA of HKD 2 19 billion (140 6% of 4Q19 levels) [2] - The company's gaming revenue recovery outpaced the industry, with mass market (including slots) gaming revenue reaching 163 1% of 4Q19 levels, leading the industry by 59 percentage points [3] - Non-gaming revenue recovered to 159 1% of 4Q19 levels, driven by successful events and concerts [3] - The report raises 2023-2025 revenue forecasts to HKD 24 2 billion, HKD 26 77 billion, and HKD 28 42 billion respectively, with adjusted property EBITDA forecasts of HKD 7 13 billion, HKD 8 13 billion, and HKD 8 76 billion [3] Financial Performance - 4Q23 gaming revenue reached HKD 8 5 billion, recovering to 125 1% of 2019 levels, with VIP and mass market (including slots) gaming revenue at 49 4% and 163 1% of 4Q19 levels respectively [3] - The company's market share increased to 16 3% in 4Q23 from 9 7% in 4Q19, maintaining a full-year 2023 market share of 15 1% despite new property openings by competitors [3] - MGM Macau and MGM Cotai achieved mass market table daily drop of 104 0% and 121 8% of 2019 levels respectively [3] Operational Highlights - The company's operational performance remained strong in early 2024, with January adjusted property EBITDA and market share exceeding October 2023 peak levels [3] - Chinese New Year period saw visitor numbers and gaming volumes significantly surpassing 2019 levels [3] - The company has successfully hosted concerts by international and local artists, boosting non-gaming revenue and driving foot traffic [3] Valuation - The report sets a target price of HKD 16 8, with current EV/adjusted property EBITDA multiples of 10 0x, 8 8x, and 8 1x for 2023-2025 [3] - The stock is trading at HKD 12 58, with a 52-week range of HKD 9 20-12 94 [4]