Company Reports

MGM China's second-quarter gross gaming revenue, or GGR, and adjusted EBITDA fell 2% and 5% quarter on quarter, respectively, with GGR market share expanding 0.9 percentage point to 16.4%. Adjusted EBITDA margin dropped 1.0 percentage point to 27%.

MGM China's first-quarter gross gaming revenue, or GGR, fell 6% quarter on quarter, with market share declining to 15.5% from 16.6%. Adjusted EBITDA dropped 11%, and margin compressed by 0.6 percentage points, largely due to higher branding fees payable to its parent.

As one of six casino license holders in Macao, MGM China benefits from insatiable Chinese demand for gaming, underpinned by rising per capita disposable income in China. Macao has a penetration rate of only 2% as of 2025, compared with Las Vegas’ 12%. Excluding neighboring Guangdong province, where only 8% of China’s 1.4 billion population resides, the penetration rate is less than 2%. New hotel rooms by major operators in the recent years should accommodate increased and extended visits from bigger spenders from the provinces and drive the top line for integrated resort operators like MGM China. With the gradual ramp-up of traffic allowed on the Hong Kong-Zhuhai-Macao bridge, the 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.

MGM China released its full-year 2025 results, with net revenue and adjusted property EBITDA rising 9% and 10% year over year, respectively. The company declared a final dividend of HKD 0.353 per share, bringing the full-year payout to HKD 0.666 per share.

MGM China posted solid fourth-quarter results, with gross gaming revenue, or GGR, up 11% and adjusted EBITDA surging 16% quarter on quarter to a record high. The company also gained 60 basis points of sequential GGR market share, reaching 16.4%.

As one of six casino license holders in Macao, MGM China benefits from insatiable Chinese demand for gaming, underpinned by rising per capita disposable income in China. Macao has a penetration rate of only 2% as of 2025, compared with Las Vegas’ 12%. Excluding neighboring Guangdong province, where only 8% of China’s 1.4 billion population resides, the penetration rate is less than 2%. New hotel rooms by major operators in the recent years should accommodate increased and extended visits from bigger spenders from the provinces and drive the top line for integrated resort operators like MGM China. With the gradual ramp-up of traffic allowed on the Hong Kong-Zhuhai-Macao bridge, the 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.

MGM China's third-quarter operating performance softened, with gross gaming revenue, or GGR, and adjusted EBITDA falling 3.4% and 5.5%, quarter on quarter, respectively. This reflects a drop in GGR market share to 15.5%, from 16.6% a quarter ago.

As one of six casino license holders in Macao, MGM China benefits from insatiable Chinese demand for gaming, underpinned by rising per capita disposable income in China. Macao has a penetration rate of less than 2% compared with Las Vegas’ 12%. Excluding neighboring Guangdong province, where only 8% of China’s 1.4 billion population resides, the penetration rate is merely 1%. New hotel rooms by major operators in the recent years should accommodate increased and extended visits from bigger spenders from the provinces and drive the top line for integrated resort operators like MGM China. With the gradual ramp-up of traffic allowed on the Hong Kong-Zhuhai-Macao bridge, the 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.

MGM China's share price surged by 7% following its strong second-quarter results, marked by a 12% quarter on-quarter increase in gross gaming revenue, or GGR, and a 6% sequential rise in adjusted EBITDA to a record HKD 2.5 billion.

As one of six casino license holders in Macao, MGM China benefits from insatiable Chinese demand for gaming, underpinned by rising per capita disposable income in China. Macao has a penetration rate of less than 2% compared with Las Vegas’ 12%. Excluding neighboring Guangdong province, where only 8% of China’s 1.4 billion population resides, the penetration rate is merely 1%. New hotel rooms by major operators in the recent years should accommodate increased and extended visits from bigger spenders from the provinces and drive the top line for integrated resort operators like MGM China. With the gradual ramp-up of traffic allowed on the Hong Kong-Zhuhai-Macao bridge, the 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.

As one of six casino license holders in Macao, MGM China benefits from insatiable Chinese demand for gaming, underpinned by rising per capita disposable income in China. Macao has a penetration rate of less than 2% compared with Las Vegas’ 12%. Excluding neighboring Guangdong province, where only 8% of China’s 1.4 billion population resides, the penetration rate is merely 1%. New hotel rooms by major operators in the recent years should accommodate increased and extended visits from bigger spenders from the provinces and drive the top line for integrated resort operators like MGM China. With the gradual ramp-up of traffic allowed on the Hong Kong-Zhuhai-Macao bridge, the 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.

MGM China's first-quarter gross gaming revenue, or GGR, grew 0.7% quarter on quarter, maintaining a stable 15.7% market share. Adjusted EBITDA rose by 11.4% from a quarter ago, with the EBITDA margin expanding by 2.8 percentage points, driven by prudent cost control and operating efficiency.

MGM China's share price surged by 6% following the firm's solid fourth-quarter results, with gross gaming revenue rising by 10% from the prior quarter. This implies a sequential GGR market share gain to 15.6% from 14.8%, leading to a 7% sequential increase in adjusted EBITDA.

As one of six casino license holders in Macao, MGM China benefits from insatiable Chinese demand for gaming, underpinned by rising per capita disposable income in China. Macao has a penetration rate of less than 2% compared with Las Vegas’ 12%. Excluding neighboring Guangdong province, where only 8% of China’s 1.4 billion population resides, the penetration rate is merely 1%. New hotel rooms by major operators in the recent years should accommodate increased and extended visits from bigger spenders from the provinces and drive the top line for integrated resort operators like MGM China. With the gradual ramp-up of traffic allowed on the Hong Kong-Zhuhai-Macao bridge, the 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 maintain our fair value estimate of narrow-moat MGM China at HKD 12.50 per share, following the firm's in-line third-quarter results. Although the performance was weaker than the prior quarter, with revenue and adjusted EBITDA sequentially dropped 9% and 19% respectively, the firm continued to lead its Macao peers with gross gaming revenue, or GGR, and adjusted EBITDA 14% and 28% above its 2019 levels. Meanwhile, industry GGR has just returned to 79% of its 2019 level during the quarter. We think these well demonstrate the firm's strong operating efficiency and deep understanding of customers.

We raise our MGM China fair value estimate to HKD 12.50 per share from HKD 11.80, following the firm’s continued outperformance in the second quarter with adjusted EBITDA of HKD 2.443 billion, 9% above Bloomberg consensus. MGM China is leading growth among its Macao peers during the quarter—gross gaming revenue, or GGR, and adjusted EBITDA were 37% and 68% above its 2019 levels, while industry GGR has just returned to 77% of its 2019 level. We think MGM China’s solid results demonstrate the firm’s strong operating efficiency with a deep understanding of customers. This, along with an increase in table allocation, successful remodeling and renovation of gaming floors and suite products, and utilization of data analytic tools, should continue to help the firm attract more quality customers with higher spending on both gaming and nongaming segments. We raise our 2024-28 net profit forecasts by 5%-13% and adjusted EBITDA by 4%-14%, to reflect a stronger-than-expected growth outlook.

As one of six casino license holders in Macao, MGM China benefits from insatiable Chinese demand for gaming, underpinned by rising per capita disposable income in China. Macao has a penetration rate of less than 2% compared with Las Vegas’ 13%. Excluding neighboring Guangdong province, where only 8% of China’s 1.4 billion population resides, the penetration rate is merely 1%. New hotel rooms by major operators in the next few years should accommodate increased and extended visits from bigger spenders from the provinces and drive the top line for integrated resort operators like MGM China. With the gradual ramp-up of traffic allowed on the Hong Kong-Zhuhai-Macao bridge, the 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 MGM China posted another record-breaking quarter for both earnings and market share, with adjusted EBITDA of HKD 2.5 billion and market share of 17.0% in gross gaming revenue, or GGR, up from 16.3% a quarter ago. Its performance continued to lead the growth of its Macao peers, owing to a seasonally strong VIP segment performance, but we expect its market share to normalize to 15%-16% in the coming quarters. We retain both our earnings forecasts and fair value estimate of HKD 11.80 per share. We think the shares are fairly valued, as we continue to believe its limited room supply remains a constraint, which will slow the company’s earnings growth and lead to a gradual fall in market share. Sands China remains our top pick for the sector, which we think will be the key beneficiary of further demand recovery in Macao, underpinned by its focus on the mass market, well-positioned properties with the largest room counts in Macao, and a successful track record in nongaming activities.