Incident: The company announced its 2021 full-year results announcement. The Group achieved net revenue of HK$19.7 billion, an increase of 53% over the previous year, and achieved an adjusted EBITDA of HK$3.5 billion, an increase of 447% over the previous year. Net gaming revenue was HK$14 billion, an increase of 64% over the previous year, and recovered to 32.15% in 2019. Non-gaming revenue was HK$2,663 million, an increase of 69.5% over the previous year.
Midmarket business recovered far faster than the industry. The adjusted EBITDA grew rapidly in 21Q4 21Q4. The 21Q4 company achieved net revenue of HK$4.75 billion, down 7% year on year, and up 11% month on month. The adjusted EBITDA was HK$1.04 billion, up 3% year on year and 107% month on month. Due to extensive adjustments in the regulatory environment, 2021Q4 suspended VIP lounge operations, causing VIP lounge business revenue to decline year on year, but the midfield business recovered rapidly. In 21Q4, the company's midfield business achieved gaming revenue of HK$3,027 million, an increase of 31.6% over the previous month, which led to an increase in overall gaming revenue. Looking at the full year, the company's midfield business achieved a total revenue of HK$11.238 billion in 2021, an increase of 83.4% over the previous year, returning to 38% in 2019, far exceeding the industry average. We believe that the development of the midmarket business is closely related to passenger traffic. Although the number of visitors to Macao increased in 2021, the level is still far lower than before the pandemic. The company has comprehensive vacation and non-gaming facilities, and has a strong passenger reception capacity. In the future, with the gradual restoration of the e-visa system and group tours and the liberalization of customs clearance in Hong Kong and Macao, it will drive further rapid development of the midmarket business.
The high-end midmarket drives steady gaming revenue performance during the Spring Festival holiday. The dividend distribution shows confidence in the company's development. The company said that during the 2022 Spring Festival, although the number of visitors was less than expected due to travel restrictions, the gaming revenue performance was steady under the influence of the high-end midmarket. Hotel occupancy rates increased. At the same time, sales in non-gaming shopping malls were ideal. We believe that the company's deep accumulation of VIP business accumulated high-quality customer resources for its high-end midmarket and direct VIP business, which is expected to further drive the increase in gaming revenue and profit margins in the future.
In terms of new construction, the company has basically completed the third phase in Cotai. Galaxy Raffles Macau (450 rooms) will open in line with market conditions, followed by the Galaxy International Convention Center and Andaz Hotel Macau. Currently, it is focusing on the fourth phase of the project and actively promoting Hengqin's development plans. Furthermore, the company announced that it will pay a special dividend of HK$0.3 per share on April 29, 2022, demonstrating the company's confidence in future development.
Profit forecast and investment advice: We believe that as a leader in the Macau gaming industry, the market share of VIP and midfield businesses is at the forefront of the industry. At the same time, the company has vigorously expanded non-gaming projects in recent years, driving the diversified development of the Macau industry. It may have a strong competitive advantage during subsequent gaming license bidding. Due to the rapid recovery of the company's midfield business, we raised the company's total net revenue for 2022-2023 to HK$338.58/42,468 billion (previous value was HK$304.05/406.637 billion), adjusted EBITDA At HK$7.274/13.098 billion (previous value of HK$641/11.52 billion), it maintained its “buy” rating.
Risk warning: repeated risks of the epidemic, increased competition risks, macroeconomic risks, policy risks, new business expansion falls short of expected risks.