JP Morgan expects Galaxy Entertainment to gradually increase dividends in the future and maintains an "Overweight" rating as its preferred choice

JP Morgan's research report pointed out that Galaxy Entertainment (00027.HK) announced its full-year results for the year ended December last year yesterday, with the fourth-quarter performance exceeding the market's upgraded forecasts. The market share increased by 160 basis points quarter-on-quarter to 21.7%, and profits expanded by 29% quarter-on-quarter. The final dividend of HKD 0.8 per share implies a payout ratio of 61% for the fiscal year 2025, which is a solid performance and aligns with JP Morgan's expectations. However, some bulls hoping for a higher dividend payout ratio may feel slightly disappointed by this dividend. JP Morgan maintains an "Overweight" rating on Galaxy Entertainment, viewing it as a preferred stock; the target price is HKD 52, and they hold a "Selective" view on the sector.

JP Morgan indicated that no particularly negative factors were found in the results. However, to express their stance, the final dividend of HKD 0.8 means a total dividend of HKD 1.5 for the fiscal year 2025, which may leave some bullish investors feeling slightly disappointed. According to JP Morgan's recent communications with investors, some investors originally expected a larger increase and anticipate that future dividends will be gradually raised, with potentially good news when the mid-year results for the fiscal year 2026 are announced in August