Good results slightly ahead of consensus MGM China pre-branded property EBITDA of US$220m, +10% YoYand +13% QoQ. This is inline with our US$222m and slightly ahead of consensuspects of Cus$210m. VIP volumes grew +34% YoY, outpacing market growth of +9-10% as the new VIP product added in Q312 introduced to prove immenselysuccessful. Mass/slot revenue growth of +22% (market +27%) is also impressive in our opinion, given the addition of competition in the interim period. Earning above fair share management's strong execution involves the property to continue to earn above its “fair share”. We estimate MGM owned 10%/5.5% of VIP/mass tables in Q2, buttress VIP volume/mass revenue share of 11%/7.4% revenue share. We also note that to reduce resource its VIP expansion, MGM's allocation of table to massarea is actually down 9% YoY yet revenue grew +29%, in-line with market growth. Interim dividend calculation The Company calculated a regular interim dividend of HK$0.23/sh, estimated apayout ratio of 35% on interim earnings, in line with the dividend policymaking in Feb 2013. WE EXPECT THE COMPANY TO DECLARE ANOTHER TRANCHE OFREGULAR DIVIDEND BASED ON H213 EARNINGS (35% PAYOUT), PLUS A SPECIAL DIVIDEND, WHEN IT FEBRUES ITS FY13 IN FEB 2014. Our FY13 total DPS forecast ISHK$0.97/sh. Valuation: Neutral, PT HK$21.7 Our SOTP-derived PT is based on target 11.5x 2013E EBITDA, with HK$2.6/shfor Cotai project.
【瑞银证券】MGM China:Strong execution underlies good results
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