SJM HOLDINGS(00880) 东吴证券国际·2024-05-11 01:32Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company's performance in Q1 2024 was slightly below expectations, primarily due to one-time opening costs associated with the Versace hotel. The net revenue for Q1 2024 was HKD 6.92 billion, aligning closely with Bloomberg's consensus estimate of HKD 6.85 billion, and recovering to 68.2% of Q1 2019 levels. Gaming and non-gaming net revenues were HKD 6.46 billion and HKD 460 million, respectively, recovering to 76.3% and 250.5% of the same period in 2019 [1] - The "One SJM" strategy has proven effective, with gaming revenue accelerating recovery. Total gaming revenue for Q1 2024 reached HKD 6.89 billion, recovering to 66.2% of Q1 2019 levels. VIP and mass market gaming revenues were HKD 650 million and HKD 6.25 billion, respectively, recovering to 16.4% and 96.4% of the same period in 2019 [1] - The company maintains a market share target of 5% for the Grand Lisboa, with a current market share of 2.0% in Q1 2024, which increased to 2.2% in April 2024. The company plans to enhance accessibility and increase marketing personnel to achieve this target [1] Summary by Sections Financial Performance - For 2023A, total revenue was HKD 21,623.2 million, with projections of HKD 29,138.4 million for 2024E, HKD 30,675.9 million for 2025E, and HKD 32,042.5 million for 2026E. The year-on-year growth rates are 223.8% for 2023A and 34.8% for 2024E [2] - Adjusted EBITDA for 2023A was HKD 1,928.0 million, with projections of HKD 4,050.0 million for 2024E, HKD 4,672.2 million for 2025E, and HKD 4,969.0 million for 2026E, reflecting a year-on-year growth of 110.1% in 2024E [2] - The diluted earnings per share for 2023A was -0.28 HKD, with projections of 0.07 HKD for 2024E, 0.19 HKD for 2025E, and 0.26 HKD for 2026E [2] Operational Insights - The average daily operating expenses for Q1 2024 were approximately HKD 20.4 million, a 5.5% increase from the previous quarter, mainly due to one-time opening costs and the addition of 20-30 marketing personnel [1] - The company expects that once the Grand Lisboa achieves its target market share, the average daily operating expenses will approach HKD 8 million [1] Valuation Metrics - The current stock price corresponds to an EV/Adjusted EBITDA of 11.34 for 2024E, 9.83 for 2025E, and 9.25 for 2026E. The target price is set at HKD 3.6, maintaining a "Buy" rating [1]