Core Viewpoint - Morgan Stanley's report indicates that the acquisition of the Parisian Macao and the Studio City satellite casino by Suncity Group Holdings (00880) in Q4 is expected to further increase the company's debt ratio, leading to a target price of HKD 2.8 and a "Reduce" rating [1] Financial Performance - Suncity Group's Q3 EBITDA was HKD 881 million, representing a 28% quarter-on-quarter increase but a 15% year-on-year decline, aligning with both Morgan Stanley's and market expectations [1] - The market share in the mass gaming segment decreased by 110 basis points, primarily due to the underperformance of satellite casino operations [1] - The full-year EBITDA forecast for the group is HKD 3.529 billion, implying a required quarter-on-quarter growth of 14% to reach HKD 1.002 billion in Q4, which Morgan Stanley considers overly optimistic [1] Debt and Expenses - The group's net debt reached HKD 21.8 billion in Q3, with a net debt to EBITDA ratio of 6.2 times, the highest in the Macau industry over the past 12 months [1] - Daily operating expenses for Q3 were HKD 21.5 million, remaining stable quarter-on-quarter; however, the closure of satellite casinos is expected to increase daily costs by HKD 3.5 million to HKD 3.7 million [1] Management Expectations - Management anticipates that the transfer of 100 new gaming tables and a strong marketing team from the satellite casinos will enhance the performance of the high-end business at the Grand Lisboa next year [1]

Core Viewpoint - Morgan Stanley predicts that the acquisition of the Parisian Macao and the Studio City satellite casinos by SJM Holdings (00880) in Q4 will further increase the company's debt ratio, leading to a target price of HKD 2.8 and a "Reduce" rating [1] Financial Performance - SJM Holdings reported an EBITDA of HKD 881 million for Q3, representing a quarter-on-quarter increase of 28% but a year-on-year decline of 15%, aligning with market expectations [1] - The market anticipates that the total EBITDA for the year will reach HKD 3.529 billion, indicating a need for a quarter-on-quarter growth of 14% to HKD 1.002 billion in Q4, which Morgan Stanley considers overly optimistic [1] Market Share and Debt Levels - The company's market share in the mass gaming segment decreased by 110 basis points, primarily due to the underperformance of satellite casino operations [1] - As of Q3, SJM Holdings' net debt reached HKD 21.8 billion, with a net debt to EBITDA ratio of 6.2 times, the highest in the Macau industry [1] Operating Expenses - The daily operating expenses for Q3 were HKD 21.5 million, remaining stable quarter-on-quarter; however, the closure of satellite casinos is expected to increase daily costs by HKD 3.5 million to HKD 3.7 million [1] - Management aims to enhance the performance of the high-end business at the Grand Lisboa through the transfer of 100 new gaming tables and a strong marketing team next year [1]