Galaxy earnings back to 2019 levels on the success of phase 3 expansion – Investment bank
Thursday 05 de October 2023 / 12:00
2 minutos de lectura
(Macau).- Galaxy Entertainment Group (GEG) is expected to witness a significant earnings rebound reaching 2019 levels, driven by the full opening of its phase 3 project, according to investment bank Jefferies.
In a recent report, analyst Andrew Lee noted that the new amenities from Galaxy phase 3 are anticipated to be a key differentiator in 2024, “given the change in the player profile”.
The evolving profile is characterised by younger mass players, more female customers, a higher proportion of non-Guangdong players and family-oriented visitors.
Galaxy’s phase 3 property has achieved full operation with the recent openings of the Andaz hotel in September and the Raffles hotel in August. These two new additions have expanded the total number of hotel rooms to 5,000.
The phase 4 project, initially scheduled for a 2027 launch, has been rescheduled to open in 2026, providing additional 1,600 rooms, with a back-end loaded capital expenditure of HKD20 billion (MOP20.6 billion).
Other factors contributing to the improvement in earnings include Macau’s gross gaming revenue recovery and the resurgence of premium mass tables to pre-pandemic levels after the opening of the Raffles hotel.
Jefferies projected that GEG could raise its dividend payout ratio in the medium to long term, based on its favourable net cash position, reduced capital expenditure, and positive free cash flow.
The investment bank stays positive on the National Day Golden Week, expressing expectations of stronger performance during this period compared to the Lunar New Year and Labour Day Golden Week.
The analyst also said that Galaxy’s multi-year contract with Tencent Music, Alibaba Pictures, Warner Brothers Music, and IQIYI could enhance the company’s exposure to the Chinese market.
By Therese Tu
Categoría:Gaming
Tags: Sin tags
País: Macao
Región: Asia
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