What's new
　　Gaming operations at NagaWorld resumed on Sep 15, 2021, ending a more-than-6-month suspension that started on March 2, 2021 following a local resurgence in COVID-19. Since reopening, enhanced health measures have been implemented such as visitors must be fully vaccinated, on-the-spot rapid antigen test （valid for 7 days）， and contact tracing. We believe the operational resumption in late 3Q21 and more stringent precautionary measures will continue to support Naga's recovery in 2022.
　　Starting November 15, 2021, the 14-day quarantine policy has been lifted for fully vaccinated visitors seeking to enter Cambodia, given recent effective containment （daily case numbers are in the double digits） and the vaccination rollout （81% full vaccination rate as of January 18, 2022）。 Other Southeast Asian （SEA） countries have also started reopening their borders to vaccinated visitors from late last year, including Thailand, Malaysia and Vietnam.
　　Cambodia's recovery in visitation was mainly driven by SEA countries in 2021. For 2H21, total airplane seat capacity arriving in Cambodia from China and SEA countries fell by 58% YoY （-97% vs 2019）， dragged by China （-84% YoY; -98% vs 2019）， due to resurgence of COVID-19 in 2021, but was supported by SEA countries （+5% YoY; -96% vs 2019）。 The total visitation in Cambodia also showed similar recovery trend. We believe Naga’s recovery will continue to be led by arrivals from SEA countries, given their relaxed travel restrictions, ahead of the return of Chinese visitation.
　　Comments
　　We estimate 4Q21 total revenue to be US$126mn with substantial QoQ improvement （-52% YoY, +843% QoQ） due to the reopening since Sep 15, 2021; we estimate 4Q21 EBITDA to be US$29mn （-70% YoY）， turning positive from losses in 2Q21.
　　Valuation and recommendation
　　We cut our 2021 revenue and EBITDA forecasts 32% and 85%, and trim 2022 revenue and EBITDA forecasts 21% and 23%, since 1） gaming operations only resumed for 15 days in 3Q21, and 2） slower-than-expected recovery from recent COVID-19 outbreaks. We introduce our 2023 forecasts for revenue, US$1.2bn, and EBITDA, US$471mn （-14% and -23% vs. consensus）。 We maintain OUTPERFORM and lower our target price 10.2% to HK$8.80, implying 11x 2023e EV/EBITDA. The stock is trading at 11.8x 2022e EV/EBITDA and 9.0x 2023e EV/EBITDA; our TP offers 30.4% upside.
　　Risks
　　Uncertainty over Naga3 development; uncertainty over COVID-19 resurgence; slower-than-expected ramp-up of Naga2.