Huatai Securities lowers the target price for Melco International Development to 5.6 yuan, as the average daily gross gaming revenue recovery is weaker than peers

AASTOCKS
2025.11.10 02:21

Huatai Securities research report indicates that Melco International Development (00200.HK) subsidiary Melco Resorts & Entertainment (MLCO.US) will release its Q3 2025 financial report before the market closes on November 6th, with the opening stock price rising about 5%. This is mainly due to the company's revenue and profit exceeding expectations, and strong performance in Cyprus. Looking ahead to Q4 2025, the 10th anniversary celebration of Studio City and related promotional activities are expected to bring additional customer traffic; however, competition in the high-end mass market may drive up marketing expenses, leading to potential fluctuations in short-term EBITDA margins.

Huatai Securities stated that Macau's gaming performance was robust during the National Day holiday, despite being affected by typhoons and the high base from last year's Andy Lau concert, with daily average gross gaming revenue (GGR) still achieving slight year-on-year growth. Looking ahead, the firm expects the upward trend in Macau's gaming industry to continue benefiting from policy support, the wealth effect of residents, and synergies from non-gaming businesses. The wealth effect brought by the "one visa multiple entries" policy and the simultaneous rise of "golden stock coins" is expected to further boost travelers' willingness to travel and consume.

The firm has lowered Melco International's EBITDA forecasts for 2025 to 2026 by 0.3%, 1.5%, and 0.6% to HKD 10.7 billion, 11.1 billion, and 11.4 billion, respectively, mainly due to intensified industry competition and marketing expenses potentially putting pressure on EBITDA margins. Based on the industry average of 8.7 times for 2026, applying a discount of about 25%, it maintains an enterprise value multiple (EV/EBITDA) of 6.6 times for 2026, lowering the target price from HKD 6.1 to HKD 5.6, and maintaining a "Buy" rating

Source: AASTOCKS The copyright of this article belongs to the original author/organization.
The views expressed herein are solely those of the author and do not reflect the stance of the platform. The content is intended for investment reference purposes only and shall not be considered as investment advice. Please contact us if you have any questions or suggestions regarding the content services provided by the platform.
© 2025 Longbridge｜Disclaimer