Xingzheng International: First Pay Galaxy Entertainment (00027) “Buy” Rating Scale Remains Leading, New Supply Awaiting Release
The Zhitong Finance App learned that the first coverage gave Galaxy Entertainment (00027) a “buy” rating. The company's middle and high-end strategy was very effective. The cumulative market share from Q1 to Q3 of 2025 continued to grow year on year. The Galaxy Arena hosted a number of large-scale international entertainment events to attract and convert tourists, and the opening of the high-end property Capella brought synergy. The company's Galaxy Phase IV is a scarce new supply in Macau. It is currently under construction. It is expected to be completed and operated in phases in 2027, which is expected to contribute to the next growth point. I am optimistic about the company's scale advantage, supply release potential, middle and high-end customer stickiness, steady management and operation capabilities, and industry-leading financial advantages.
Xingzheng International's main views are as follows:
2025Q3 performance maintained strong growth
The company's net revenue for 2025Q3 was HK$12.2 billion, up 14% year on year and 1% month on month. Among them, the net revenue of Galaxy Macau and StarWorld Macau was HK$10.1 billion and HK$1.3 billion, up 20% year on year and down 6%, respectively, up 1% and 8% month-on-month respectively. The adjusted EBITDA was HK$3.3 billion, up 14% year on year and down 6% month on month. Among them, Galaxy Macau and StarWorld Macau were HK$3.1 billion and HK$370 million respectively, up 20% and 7% year-on-year respectively, down 8% and 22% month-on-month respectively. The company's overall adjusted EBITDA rate for 2025Q3 was 27.5%, a year-on-year decrease of 0.1 percentage points. The Group's month-on-month decline in EBITDA in the third quarter was related to fluctuations in win rate. If the win rate was normalized, adjusted EBITDA increased 5% month-on-month. The company's performance in the first three quarters maintained superior growth than the industry average, laying a solid foundation for full-year performance growth.
Maintain a high level of dividend payout
2025H1 declared a dividend of HK$0.7 per share, accounting for 58% of EPS during the period. The dividend payout ratio increased in the medium term, and the company is expected to maintain a steady and generous dividend policy. The current 2025E dividend yield is 3.5%.
The bet amount and win rate increased at the same time
In 2025Q3, the company's VIP, midfielder, and slot machine bets were HK$650, 354, and 27.4 billion, up 46%, 12%, and 3% year-on-year, up 17%, up 1%, and down 4% month-on-month. Despite the negative impact of the typhoon in the third quarter, which led to the phased closure of casinos and a reduction in passenger flow into Macau, the company's bet volume continued to grow rapidly year-on-year. In terms of win rate, benefiting from the popularity of smart gaming tables and the increase in innovative gameplay, the company's overall win rate also increased year-on-year, boosting GGR growth.
The cumulative market share continued to grow year on year
The 2025Q3 company's GGR was HK$2, 95, and 700 million, respectively, up 86%, 13%, and 11% year-on-year, down 15% (the reason for the win rate), 7%, and 6% month-on-month. The GGR of the three major business guests, midfielders, and slot machines in the 2025Q3 industry increased by 29.1%, 7.2%, and 10.5% year-on-year. The company's total GGR growth rate (20.6%) was higher than that of the industry (12.5%), the month-on-month growth rate (1.9%) was lower than that of the industry (2.3%), and its market share increased year-on-year, and declined slightly from month to month. The bank calculated that the company's GGR share in 2025Q3 was 19.6%. The cumulative market share for the first three quarters of 2025 was 19.4%, and the cumulative share increased year-on-year.
Risk Alerts
The competitive environment has intensified, residents' willingness to travel and spend has declined, tourism policies have changed, and regulatory policies have changed.