Lyon's research report states that during the first three days of the National Day Golden Week in Macau, the number of visitors performed strongly, reaching an average of 0.1596 million people per day, a 5% increase compared to the same period in 2019. It is currently forecasted that the gambling revenue in October will increase by 6% year-on-year, reaching 20.65 billion Macau patacas, in line with market expectations.
Lyon pointed out that the current valuation of the Macau gambling industry is approximately 10.3 times the forecasted Enterprise Value to EBITDA ratio for 2024, lower than the average of 14.2 times. Considering the improved market sentiment, the target prices of six major gambling companies have been raised. The rating of Sands China (02282.HK) and MGM China (01928.HK) has been upgraded to 'outperform the market', with target prices raised to 15.6 yuan and 25.1 yuan respectively.
The target prices of Galaxy Entertainment (00027.HK) and Wynn Macau (01128.HK) have been raised to 47.3 yuan and 8.4 yuan respectively. The target price of Melco Resorts and Entertainment (MLCO.US) has been raised from $6.2 to $9.2, with a 'outperform the market' rating for both.
