Core Viewpoint - Galaxy Entertainment's 4Q25 performance met expectations, with revenue of HKD 13.833 billion, a year-on-year increase of 22% and a quarter-on-quarter increase of 14%, recovering to 107% of 4Q19 levels [1] Financial Performance - Adjusted EBITDA for 4Q25 was HKD 4.296 billion, up 33% year-on-year and 29% quarter-on-quarter, recovering to 106% of 4Q19 levels, exceeding Visible Alpha's consensus estimate of HKD 3.984 billion but aligning closely with the company's forecast of HKD 4.221 billion [1] - The average daily fixed operating cost for 4Q25 was approximately HKD 3.7 million, benefiting from IT upgrades that improved cost control [1] Development Trends - Management emphasized that no trademark licensing fees will be paid as all trademarks and brand names belong to the company, ensuring aligned interests [1] - There has been an increase in customers from regions outside of China, attributed to the establishment of sales offices in Tokyo, Seoul, Bangkok, and Singapore [1] - Management hopes to obtain additional gaming tables for Phase Four, designed as a comprehensive resort with rich non-gaming projects, which is expected to complement Phase Three and boost the Galaxy International Convention Center and Galaxy Arena [1] Dividend and Investment Outlook - The company announced a final dividend of HKD 0.80 per share, with a payout ratio of 65% for 2H25, compared to 30% in 2019 [2] - The company aims to maintain its current reinvestment rate and is expected to benefit from strong post-holiday demand due to the extended 9-day Chinese New Year holiday in 2026 [2] Earnings Forecast and Valuation - The company maintains its adjusted EBITDA forecasts for 2026 and 2027, with the current stock price corresponding to 9 times the 2026 EV/adjusted EBITDA [2] - The target price is set at HKD 44.10, reflecting 11 times the 2026 EV/adjusted EBITDA, indicating a 6% upside potential from the current stock price [2]

Core Viewpoint - The report from Xingsheng International initiates coverage on Galaxy Entertainment (00027) with a "Buy" rating, highlighting the effectiveness of the company's mid-to-high-end strategy and its potential for growth through new developments and market share increases [1] Group 1: Financial Performance - In Q3 2025, the company's net income reached HKD 12.2 billion, representing a year-on-year increase of 14% and a quarter-on-quarter increase of 1% [2] - Adjusted EBITDA for Q3 2025 was HKD 3.3 billion, up 14% year-on-year but down 6% quarter-on-quarter, with an overall adjusted EBITDA margin of 27.5%, a slight decrease of 0.1 percentage points year-on-year [2] - The company's performance in the first three quarters of 2025 has outpaced the industry average, laying a solid foundation for annual growth [2] Group 2: Dividend Policy - For H1 2025, the company declared a dividend of HKD 0.7 per share, which represents 58% of the earnings per share (EPS) for the period, indicating a robust and generous dividend policy [3] - The expected dividend yield for 2025 is 3.5% [3] Group 3: Betting and Win Rates - In Q3 2025, the company's betting amounts for VIP, mass market, and slot machines were HKD 65 billion, HKD 35.4 billion, and HKD 27.4 billion, showing year-on-year growth of 46%, 12%, and 3% respectively [4] - The overall win rate improved due to the adoption of smart tables and innovative gameplay, contributing to the growth of Gross Gaming Revenue (GGR) [4] Group 4: Market Share - The company's GGR for Q3 2025 was HKD 20.95 billion, reflecting a year-on-year increase of 20.6%, which is higher than the industry average growth of 12.5% [5] - The company's market share for Q3 2025 was calculated at 19.6%, with a cumulative market share of 19.4% for the first three quarters of 2025, indicating a year-on-year increase [5]