HSBC Research slightly raised the target price for MGM CHINA to HKD 16.7, with strong market share growth in July

HSBC Global Research published a report indicating that MGM China (02282.HK) performed strongly in the latest quarterly results, with property EBITDA increasing by 7% quarter-on-quarter. The performance in the second quarter of 2025 exceeded market expectations by 4%, and the adjusted earnings margin was in line with expectations. According to the bank's estimates, daily operating expenses rose slightly from USD 3 million in the first quarter to USD 3.2 million in the second quarter due to the opening of Alpha Villas. HSBC Research estimates that, due to changes in the business portfolio, the reinvestment rate increased by 2.5 percentage points. More importantly, MGM China's market share remained stable at around 15%, while maintaining a strong profit margin of 29%, once again demonstrating the company's excellent execution capability and operational efficiency. The company's market share continued to grow, with particularly outstanding performance in July, further confirming its competitive advantage.

Based on the second quarter's performance exceeding expectations, the bank raised MGM China's EBITDA forecast for 2025 by 1%, slightly increasing the target price from HKD 16.5 to HKD 16.7, indicating a potential upside of 7%. With an attractive valuation based on approximately 11 times the projected price-to-earnings ratio for 2025 and about a 4% dividend yield, the bank maintains a "Buy" rating