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MGM China Holdings:Results:1Q16Inline;Management Expects MGM Cotai to Open in 1Q17

发布时间:2016-05-05    研究机构:花旗环球金融

Citi's Take — MGM reported 1Q16 revenue of HK$3,647m, -25% YoY, below ourestimate of US$3,890m. However, property EBITDA of HK$995m (-23% YoY) wasinline with our forecast of HK$972m, thanks to a favorable VIP/mass shift and bettercosts savings. Management addressed that EBITDA margin was negativelyimpacted by lower table games hold in In-house VIP and mass table games. On anormalized hold basis, EBITDA margin would have been flat sequentially. MGMCotai remains on track for opening in 1Q17.

Operating Trends — Mass table revenue at MGM China fell 8% YoY while slotrevenue dropped 22% YoY. Meanwhile, VIP revenue declined 39% YoY, hit by a34% YoY decline in volumes and a less favorable hold of 3.0% (vs, 3.3% in 1Q15).

Hotel occupancy remained solid at 94.1% (vs. 97.5% in 4Q15 and 98.0% in 1Q15).

Citi’s Macau Mass Baccarat Table Survey: MGM +10% MoM in April —Minimum bets in Mass Baccarat grew 2% MoM in our April survey, yielding anaverage minimum bet amongst the 11 major casinos of HK$1,744 (vs. HK$1,716 inMarch). Cotai averaged HK$1,907 while Peninsula averaged HK$1,466 in April.

Notably, minimum bets at the Venetian, Sands Macao and MGM grew 18% MoM,17% MoM and 10% MoM respectively.

Implications — Reflecting 1Q16 results, we raise our FY16-17E earnings by 2-5%.

We maintain our Buy rating with an unchanged TP of HK$15.50. MGM China hasbeen showing resilience in defending its market share, despite fierce competitionfrom Cotai.

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