[ET Net News Agency, 19 November 2019] Morgan Stanley raised its target price for MGM
China (02282) to HK$16.5 from HK$15.5 and maintained its "overweight" rating.
The research house reduced its MGM Peninsula EBITDA due to cannibalization and
competition from Wynn. However, Morgan said MGM Cotai should continue to ramp. It expects
MGM Cotai EBITDA of HK$3.2bn (+28% YoY) in 2020.
Morgan also expects 4Q corporate EBITDA of HK$1.5bn (+16% YoY, +5% QoQ). It expects the
company to gain market share in 2019/2020 due to the continuous ramping up of Cotai, as it
did so far in 2019. However, Morgan has concerns about Cotai ramp-up, such as limited
tables and relatively smaller room sizes. Uncertainty around license renewal could also
weigh on valuation multiples. (KL)