Damo: MGM China (02282) and Galaxy Entertainment (00027) are expected to record double-digit increases in gaming revenue in the fourth quarter of this year and the first quarter of next year.

The Zhitong Finance App learned that Morgan Stanley released a research report saying that Macau's gaming revenue for the fourth quarter is expected to increase 17% year on year. Currently, it is predicted that the industry's EBITDA will increase 15% year on year, which is higher than the general expectations of the market. Damo continues to rank MGM China (02282) and Galaxy Entertainment (00027) as top choices. Fourth-quarter results are expected to drive up market profit forecasts. Currently, it is predicted that gaming revenue will still record double-digit growth in the fourth quarter and the first quarter of next year, and the valuation of gaming companies will also be supported by a potential increase in dividends.

The bank expects gaming operator property EBITDA to increase 15% quarterly and 6% year-on-year in the fourth quarter. Despite high operating expenses, profit margins are likely to improve. Dama gave GEG a “in sync with the market” rating, mainly based on its low dividend return and high corporate value ratio, and the target price was lowered from HK$44 to HK$43; it also indicated that Sands China (01928) was striving for more market share, plus potential dividend doubling, giving it an “increase in weight” rating, and the target price remained at HK$23.