[ET Net News Agency, 17 September 2019] Morgan Stanley raised its target price for
Galaxy Entertainment (00027) to HK$52 from HK$50 and maintained its "equal-weight" rating.
Despite its expectation of September GGR growth of 4% (after two months of negative
growth), the research house expects negative GGR growth in November/December. Many
macroeconomic indicators are suggesting a VIP recovery between now and December, yet VIP
revenue has deteriorated further in the past three months, Morgan noted.
Morgan expects Macau GGR to be MOP72bn in 3Q (-3% YoY, -2% QoQ). This is weaker than
normal seasonality. It expects Galaxy to show EBITDA declines QoQ in view of higher
exposure to VIP business. Morgan now sees 3Q and 4Q property EBITDA of US$543mn (-8% QoQ)
and US$552mn (+1.7% QoQ) respectively. (KL)