GF Securities: Galaxy Entertainment (00027) maintains a “buy” rating with a reasonable value of HK$36.67 per share
The Zhitong Finance App learned that GF Securities released a research report stating that it maintains Galaxy Entertainment's (00027) “buy” rating. The bank believes that the company's investment in concerts, hotels, etc. has achieved remarkable results, and the market share is expected to continue to increase. The bank expects the adjusted EBITDA of the company to be HK$14.815 billion and HK$15.484 billion in 2026 and 2027, respectively. Based on the company's adjusted EBITDA in 2027, with reference to comparable companies, the bank gave the company 10.0 times EV/EBITDA (adjusted caliber EBITDA) in 2027, and the reasonable value of the corresponding company was HK$36.67 per share.
The main views of GF Securities are as follows:
Galaxy Entertainment Announces Third Quarter 2026 Results
Galaxy Entertainment's net revenue for the third quarter of 2026 was $12.7 billion (HKD if not specified), up 4% year on year, up 7% month on month; adjusted EBITDA was 3.7 billion yuan, up 10% year on year, up 9% month on month, and increased by about 584 million yuan due to high net profit margin. After normalization, adjusted EBITDA was 3.1 billion yuan, down 7% year on year and 9% month on month. Market competition is still fierce. The July World Cup had a brief diversion effect on passenger flow, but thanks to the high volume of high-end customers and the high net win rate in the VIP room, performance is still growing. The company paid an interim dividend of $0.90 per share in September, with a total dividend of 1.70 yuan per share for the first nine months of 2026.
View by property
According to the company's financial report, for the third quarter of 2026, (1) Galaxy Macau's net revenue was 10.8 billion yuan, up 7% year on year, up 9% month on month; adjusted EBITDA was 3.5 billion yuan, up 15% year on year, up 11% month on month; excluding net profit ratio factors, EBITDA for the third quarter was 3 billion yuan, down 3% year on year and 8% month on month. Among them, VIP room revenue was 2.9 billion yuan, up 42% year on year, up 76% month on month; midfield revenue was 8.1 billion yuan, down 1% year on year and 2% month on month. (2) StarWorld Macau's net revenue was 1.1 billion yuan, down 11% year on year and 8% month on month; adjusted EBITDA was 279 million yuan, down 24% year on year and 8% month on month; excluding net win ratio factors, normalized EBITDA for the third quarter was 271 million yuan, down 27% year on year and 14% month on month. (3) Broadway Macau's net revenue was 51 million yuan, down 18% year on year and up 24% month on month; adjusted EBITDA was 7 million yuan (1 million yuan in the third quarter of 2025, balance of income and expenditure in the second quarter of 2026). (4) The adjusted EBITDA for the construction materials business was 150 million yuan, down 27% year on year, down 12% month on month; net revenue was 670 million yuan, down 8% year on year, up 4% month on month.
New properties are expected to bring in additional volume
According to the 2026 third quarter results presentation, (1) The fourth phase of Cotai's property covers an area of about 600,000 square meters, and the interior decoration project is progressing smoothly. Five top luxury hotels, a total of 1,350 guest rooms and suites, a 5,000-seat theater, and diversified catering and retail, green gardens, water amusement park area and casino will be added, with the goal of completion in 2027. (2) Star World Hotel has been completely renovated and upgraded. The first and third floor gaming floors and dining areas have been renovated, and guest room and suite renovation projects have begun. It is expected to be completed in the first quarter of 2027.
Risk Alerts
Risk of industry uncertainty, risk of tightening foreign exchange controls, risk of fluctuations in gaming net win ratio, capital expenditure and project progress risk.