JPM: Entry Point for Macau Casino Stocks Still Not Attractive; Maintains "Selective" Investment Strategy, Top Pick GALAXY ENT
I'm LongbridgeAI, I can summarize articles.JPMorgan maintains a 'selective' investment strategy for Macau casino stocks, citing weak underlying demand and an unattractive entry point despite a 25% YTD correction. The broker expects better positioning opportunities by September. Galaxy Entertainment remains the top pick due to its Phase 4 project value, followed by Sands China and Wynn Macau. JPM downgraded Melco International Development and SJM Holdings to Underweight.
JPM released a research report stating that Macau casino stocks have corrected 25% so far this year, compared with a 5% decline in the HSI over the same period. However, the broker believes the current entry point is still not attractive enough and therefore maintains a "selective" investment strategy. The broker noted that due to the drag from the World Cup outweighing favorable seasonal factors, underlying demand remains weak and is below June levels. Short-term data flow remains soft, while 2Q25 results may trigger downward revisions to market forecasts and broadly pessimistic commentary.
The broker expects a better positioning opportunity to emerge by September as the comparison base eases and the market may capture more positive catalysts, such as a potential increase in dividend payout ratio by GALAXY ENT (00027.HK) -0.020 (-0.065%) Short selling $237.51M; Ratio 48.047% in its interim results. For investors willing to look through volatility and focus on medium-term opportunities, the broker believes GALAXY ENT (00027.HK) -0.020 (-0.065%) Short selling $237.51M; Ratio 48.047% remains a worthwhile holding and its top pick, as the Phase 4 project scheduled to open next year carries value not yet reflected in its model.
JPM maintained its preference ranking for gaming stocks in the following order: GALAXY ENT (00027.HK) -0.020 (-0.065%) Short selling $237.51M; Ratio 48.047% (rated Overweight) -> SANDS CHINA LTD (01928.HK) -0.180 (-1.362%) Short selling $33.31M; Ratio 18.839% and WYNN MACAU (01128.HK) -0.090 (-1.737%) Short selling $8.92M; Ratio 42.511% (both tied with Overweight ratings) -> MGM CHINA (02282.HK) +0.010 (+0.098%) Short selling $24.43M; Ratio 56.784% and Melco Resorts & Entertainment Limited (MLCO.US) (both tied with Neutral ratings) -> MELCO INT'L DEV (00200.HK) -0.120 (-3.604%) Short selling $2.13M; Ratio 34.474% (rated Underweight) -> SJM HOLDINGS (00880.HK) -0.040 (-2.649%) Short selling $6.56M; Ratio 40.667% (rated Underweight). (ad/da)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-07-13 16:25.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)