[ET Net News Agency, 16 September 2019] UBS Global Research tweaked its gross gaming
revenue (GGR) and market share estimates to reflect recent data releases. The research
house expects the divergence between mass and VIP to continue in 2H, with mass GGR growing
11% and VIP declining 25%.
This should mean modest sector EBITDA growth of about 5% YoY in 2H (in line with 1H),
UBS noted. The mass segment should benefit from further infrastructure improvements at
end-2019, driving growth (UBS estimates 7%) in 2020, while the VIP segment could remain
under pressure from the trade war and China macro uncertainties.
At 11x 2020 EV/EBITDA, versus a seven-year average of about 13x, UBS believes the sector
is positively skewed. It revised its target prices for the casino operators as follows:
Name Rating Target Price
----------------------------------------------------
Galaxy Ent (00027) Buy HK$62.30 from HK$58.30
Melco (00200) Buy HK$22.70 from HK$20.90
Wynn Macau (01128) Buy HK$20.00 from HK$20.70
MGM China (02282) Buy HK$15.10 from HK$15.30
Sands China (01928) Neutral HK$39.70 from HK$39.90
SJM (00880) Neutral HK$8.40 from HK$9.30
(KL)