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CBRE Equity Research is a subsidiary of Galaxy Entertainment Group Limited (OTCPK:GXYEF), Melco Resorts & Entertainment Limited (NASDAQ: MLCO), and SJM Holdings Limited (OTCPK:SJMHF), as part of an in-depth study of Macau’s gaming industry.
Analyst John Decree and his Team tagged Melco Resorts (MLCOs) and Galaxy Entertainment (OTCPK:GXYEF) has a “buy” rating and says it is the preferred choice over SJM Holdings (OTCPK: SJMHF) started with a hold.
“Based on current relative valuations, we believe MLCO shares are one of the more attractive ways to invest in this sector, with MLCO shares delivering 8.2x FY24 EBITDA, 9.9x Macau group average and Hong Kong Very attractive compared to the listed Macau group average.For investors who prefer pure investment in Macau, Galaxy with its strong balance sheet, long-term growth pipeline in Macau and strong operating track record. SJM remains the stock of choice, with a large amount of debt given the significant decline in VIP trading volume, the significant reduction in gaming capacity and the expected length of time at the Grand Lisboa Palace. We are on a difficult road to burden and deleveraging.”
Macau casinos generated total gaming revenue of MOP15.21 billion ($307 million) in June, a year-on-year growth of 514%. The return of live performances in Macau and the four-day Dragon Boat Festival holiday were cited as factors in the month’s increase in traffic, but the GGR mark fell short of analysts’ consensus forecast of a 530% year-on-year increase of 2.3. % decreased. Higher than his GGR produced in May. A series of such slowdowns has raised concerns that Macau’s recovery is stalling and could affect the casino operator’s shares when trading resumes on Monday. However, ahead of its monthly earnings report, JPMorgan said its long-term monthly trend from May to June averaged 14% for the years 2007-2022 (excluding the 2020 lockdown year). noted that it decreased. In his first six months of 2023, Macau’s gross gaming revenue increased 205% year-on-year to MOP80.14 billion ($9.93 billion). That figure is still far short of the $149 billion of patacas generated in the same period in 2019 before the pandemic.
