MGM China reported 3Q23 net revenue of HK$6.4bn and adjusted Ebitda of HK$1.9bn, in line with our expectation. We maintain EPS forecast of HK$0.52 in 23E, HK$0.69 (+32% YoY) in 24E, and HK$0.83 (+22% YoY) in 25E. We maintain target price of HK$13. With 27% upside potential, we maintain Buy rating. 3Q23 results. The company’s total gross gaming revenue (GGR) increased 583% YoY and 8% QoQ, recovering to 99% over 2019 level. Mass GGR surpassed 3Q19 by 42%, slot GGR recovered to 99% of 3Q19 level, and VIP GGR recovered to 39% of 3Q19 level. Total Ebitda exceeded 3Q19 by 22%, in which MGM Cotai exceeded 3Q19 by 45% and MGM Macau exceeded 3Q19 by 3%.
Future plan. At MGM Cotai, the company will start remodelling the premium mass gaming area early next year, and at MGM Macau, it plans for a villa upgrade, with the addition of six new villas.
Maintain Buy. We maintain target price of HK$13. With 27% upside potential, we maintain Buy rating.
Risks: Lower-than-expected revenue recovery.