Company Reports

Melco Resorts' second-quarter gross gaming revenue, or GGR, and adjusted property EBITDA in Macao fell 10% and 25% quarter on quarter, respectively. The company now expects to only resume its dividend program in 2027, a one-year delay from prior guidance.

We believe the gambling market in Macao will enjoy solid growth in the long term. This structural tailwind is driven by the rising middle class in China and the penetration rate of only 2% in Macao, compared with Las Vegas' 12%. New hotel rooms by major operators in the next few years should accommodate increased and extended visits from bigger spenders from these provinces, and drive the top line for integrated resort operators like Melco Resorts. With the gradual ramp-up of traffic allowed on the Hong Kong-Zhuhai-Macao bridge, new Hengqin border, and the Gongbei-to-Hengqin extension rail, Macao's carrying capacity for tourists should increase. In addition, neighboring Hengqin Island, 3 times the size of Macao, is under rapid development to complement Macao's growth.

We believe the gambling market in Macao will enjoy solid growth in the long term. This structural tailwind is driven by the rising middle class in China and the penetration rate of only 2% in Macao, compared with Las Vegas' 12%. New hotel rooms by major operators in the next few years should accommodate increased and extended visits from bigger spenders from these provinces, and drive the top line for integrated resort operators like Melco Resorts. With the gradual ramp-up of traffic allowed on the Hong Kong-Zhuhai-Macao bridge, new Hengqin border, and the Gongbei-to-Hengqin extension rail, Macao's carrying capacity for tourists should increase. In addition, neighboring Hengqin Island, 3 times the size of Macao, is under rapid development to complement Macao's growth.

Melco Resorts' first-quarter 2026 gross gaming revenue, or GGR, of Macao operation and adjusted property EBITDA rose by 8% and 15% quarter on quarter, respectively, leading to a strong GGR market share gain to 15.1% from 14.1% a quarter ago.

Melco Resorts' fourth-quarter gross gaming revenue, or GGR, in Macao rose 2% quarter on quarter, while adjusted property EBITDA fell 13%. This implies a sequential GGR market share loss of 0.5 percentage point to 14.0%, and a 3.4 percentage-point decline in adjusted EBITDA margin.

We believe the gambling market in Macao will enjoy solid growth in the long term. This structural tailwind is driven by the rising middle class in China and the penetration rate of only 2% in Macao, compared with Las Vegas' 12%. New hotel rooms by major operators in the next few years should accommodate increased and extended visits from bigger spenders from these provinces, and drive the top line for integrated resort operators like Melco Resorts. With the gradual ramp-up of traffic allowed on the Hong Kong-Zhuhai-Macao bridge, new Hengqin border, and the Gongbei-to-Hengqin extension rail, Macao's carrying capacity for tourists should increase. In addition, neighboring Hengqin Island, 3 times the size of Macao, is under rapid development to complement Macao's growth.

Melco Resorts' third-quarter gross gaming revenue, or GGR, and adjusted property EBITDA in Macao fell 5% and 2% quarter on quarter, respectively. Nevertheless, strong overseas operations offset the declines, keeping its adjusted EBITDA flat at USD 380 million compared with the prior quarter.

We believe the gambling market in Macao will enjoy solid growth in the long term. This structural tailwind is driven by the rising middle class in China and the penetration rate of less than 2% in Macao, compared with Las Vegas' 12%. New hotel rooms by major operators in the next few years should accommodate increased and extended visits from bigger spenders from these provinces, and drive the top line for integrated resort operators like Galaxy Entertainment. With the gradual ramp-up of traffic allowed on the Hong Kong-Zhuhai-Macao bridge, new Hengqin border, and the Gongbei-to-Hengqin extension rail, Macao's carrying capacity for tourists should increase. In addition, neighboring Hengqin Island, 3 times the size of Macao, is under rapid development to complement Macao's growth.

Macao welcomed 1.06 million tourists during the first seven days of the 2025 national holiday, according to the Macao Government Tourism Office. This implies a daily average of 150,773 visitors, up 7.4% from a year ago.

We believe the gambling market in Macao will enjoy solid growth in the long term. This structural tailwind is driven by the rising middle class in China and the penetration rate of less than 2% in Macao, compared with Las Vegas' 12%. New hotel rooms by major operators in the next few years should accommodate increased and extended visits from bigger spenders from these provinces, and drive the top line for integrated resort operators like Galaxy Entertainment. With the gradual ramp-up of traffic allowed on the Hong Kong-Zhuhai-Macao bridge, new Hengqin border, and the Gongbei-to-Hengqin extension rail, Macao's carrying capacity for tourists should increase. In addition, neighboring Hengqin Island, 3 times the size of Macao, is under rapid development to complement Macao's growth.

In the second quarter, Melco Resorts' Macao operations posted a 6% quarter-on-quarter increase in gross gaming revenue, or GGR, and a 13% rise in adjusted property EBITDA, maintaining a stable GGR market share of 15.7%, despite new projects launches by competitors in Macao.

We believe the gambling market in Macao will enjoy solid growth in the longer term. This structural tailwind is driven by the rising middle class in China and the penetration rate of less than 2% in Macao, compared with Las Vegas' 12%. New hotel rooms by major operators in the next few years should accommodate increased and extended visits from bigger spenders from these provinces, and drive the top line for integrated resort operators like Galaxy Entertainment. With the gradual ramp-up of traffic allowed on the Hong Kong-Zhuhai-Macao bridge, new Hengqin border, and the Gongbei-to-Hengqin extension rail, Macao's carrying capacity for tourists should increase. In addition, neighboring Hengqin Island, 3 times the size of Macao, is under rapid development to complement Macao's growth.

The share prices of Macao casinos surged 5%-11% after the release of June gross gaming revenue on July 1, which rose sharply by 19% from a year ago to MOP 21 billion, reaching 88.5% of the 2019 level—the highest since China lifted travel restrictions in January 2023.

Macao's 11 satellite casinos will cease operations by Dec. 31, 2025. SJM plans to acquire and convert two of its nine satellite casinos, L'Arc Macau and Casino Ponte 16, into self-promoted casinos, while the remaining seven, along with one each from Galaxy and Melco Resorts, will be closed.

Melco Resorts' first-quarter gross gaming revenue, or GGR, of Macao operation and adjusted EBITDA rose by 7% and 16% quarter on quarter, respectively, leading to a strong GGR market share gain that climbed to 15.7% from 14.7% a quarter ago.

Melco Resorts' gross gaming revenue, or GGR, increased by 4.2% from the previous quarter, while adjusted EBITDA fell by 8.5% sequentially to USD 295 million. This implies a largely stable GGR market share of 14.7%, unchanged from a quarter ago.

We believe the gambling market in Macao will enjoy solid growth in the longer term. This structural tailwind is driven by the rising middle class in China and the penetration rate of less than 2% in Macao, compared with Las Vegas' 12%. New hotel rooms by major operators in the next few years should accommodate increased and extended visits from bigger spenders from these provinces, and drive the top line for integrated resort operators like Galaxy Entertainment. With the gradual ramp-up of traffic allowed on the Hong Kong-Zhuhai-Macao bridge, new Hengqin border, and the Gongbei-to-Hengqin extension rail, Macao's carrying capacity for tourists should increase. In addition, neighboring Hengqin Island, 3 times the size of Macao, is under rapid development to complement Macao's growth.

Narrow-moat Melco Resorts’ third-quarter results were largely in line with our and the market expectations, with luck-adjusted EBITDA of USD 296 million compared with Bloomberg consensus of USD 292 million. Management indicated strong performance in October's golden week, with mass drop volume more than 20% above its 2019 level. The firm also aims to resume its dividend program in the second half of 2025. We expect the firm’s strength in the premium mass segment, its leadership in product innovation, and its continued ramp-up at Studio City phase 2 should continue to drive solid earnings growth in the mid-to-long term. We maintain our earnings forecasts and fair value estimate of USD 10.80 per share, and we think the shares are currently undervalued.

Narrow-moat Melco Resorts’ second-quarter performance was largely in line with our and the market expectations, with market share in gross gaming revenue, or GGR, rising to 14.8% from 14.2% a quarter ago. Nevertheless, adjusted EBITDA margin fell 77 basis points to 26.1% from a quarter ago due to higher cost. We expect cost to rise further amid higher reinvestment in both gaming and nongaming offerings to boost revenue and defend market share, as competition among Macao casinos is intensifying. We cut our fair value estimate to USD 10.80 per share from USD 11.60, after lowering our 2024-28 revenue forecast by 0%-4% and adjusted EBITDA by 4%-7%, to incorporate slightly weaker sales growth amid slower economic growth and still-sluggish consumption sentiment in China as well as higher operating expenses.

We believe the gambling market in Macao will enjoy solid growth in the longer term. This structural tailwind is driven by the rising middle class in China and the penetration rate of less than 2% in Macao, compared with Las Vegas' 13%. New hotel rooms by major operators in the next few years should accommodate increased and extended visits from bigger spenders from these provinces, and drive the top line for integrated resort operators like Galaxy Entertainment. With the gradual ramp-up of traffic allowed on the Hong Kong-Zhuhai-Macao bridge, new Hengqin border, and the Gongbei-to-Hengqin extension rail, Macao's carrying capacity for tourists should increase. In addition, neighboring Hengqin Island, 3 times the size of Macao, is under rapid development to complement Macao's growth.