The casino business continues to lead the market. In 2014, Macau's gaming revenue fell 2.6 per cent from a year earlier, VIP revenue fell 11 per cent, and midfield business rose 14 per cent. We expect gaming revenue from Jinbi, the flagship casino of Huicai Holdings, to grow by 18% compared with the same period last year, and the other three new casinos are growing even faster, all leading the market. In 2015, we expect Macau's gaming market to remain in the doldrums, with gaming revenues falling by 5 per cent and 10 per cent, of which adjusted midfield income increased by 0 per cent year-on-year. During the same period, Colour Holdings will continue to lead the market by virtue of its advantages in low-end midfield and direct broadcasting machines, and is expected to achieve gaming revenue growth of 11% for the whole of 2015. (Jinbi Colour increased by 8.8%, Jindu by 11%, Lisboa Live Room by 70%, Jockey Club by 125%)
The business of live broadcasters is promising. The stagnation of the company's direct broadcast machine sales in 2013 and 14 is mainly due to the lack of new casinos and the hindrance of overseas direct sales. All these factors will improve significantly in 2015. Starting in May, two large, two small and four new casinos will open this year. In the case of limited number of gambling tables and shortage of manpower, the demand certainty of live broadcasters is extremely high. Overseas markets will usher in a breakthrough after cooperation with IGT and Ainsworth. Hundreds of machines sold in 2011-12 have entered the replacement period, creating additional demand.
Adjust the profit forecast. Due to the overall slowdown in the market, we lowered our revenue growth forecast for the company's gaming operations sector and lowered its 2015 EBITDA8% for that sector. At the same time, as Sands delayed the purchase of second-generation live broadcasters, we lowered the revenue forecast of the live broadcasters sector and lowered the 2015 EBITDA12% of this sector.
Reiterate the buy rating, target price HK$3.63. Our target price is based on segment summation, giving casino operations 8x EV/EBITDA and live machine business 8.5x EV/EBIT. Macau's gaming industry is currently valued at 11-12 times EV/EBITDA, while international gaming equipment companies are currently valued at 8.5x EV/EBITDA.