King's Financial News | Soochow Securities (Hong Kong) issued a research report, pointing out that Wynn Macau (01128) 3Q24 performance fell short of expectations, achieving operational revenue of 0.87 billion US dollars during the period (below the consensus expectation of 0.89 billion US dollars), recovering to 81.2% of the same period in 2019; in 3Q24, the company's adjusted property EBITDAR was 0.26 billion US dollars, a decrease of 6.2% from the previous quarter, recovering to 87.3% of 2019, with profit recovery faster than revenue recovery.

The bank indicated that in 3Q24, the company achieved a gross gaming revenue of 0.88 billion US dollars, recovering by 70.4% from the same period in 2019. Among them, VIP/mass market (including slot machines) achieved gross gaming revenue of 0.14/0.74 billion US dollars respectively, recovering to 25.3%/106.7% of 3Q19, with recovery rates increasing by 5.5pct and decreasing by 5.3pct respectively compared to the previous quarter. Under the supervision of the Gaming Inspection Bureau, the industry's VIP/mass market (including slot machines) recovered to 42.1%/107.1%, with recovery rates increasing by 3.6pct and decreasing by 4.2pct respectively compared to the previous quarter, the company's mass market recovery speed slower than the industry.

The bank further pointed out that despite intense competition in the Macau market, the company's market share declined in 2Q24, but rebounded to expected levels in July with strong growth in mass market gaming revenue and a hotel occupancy rate of 99%. Management expressed that they will shift away from focusing on market share fluctuations in the future, aiming to maximize EBITDA, continue to optimize and expand dining facilities (such as Nine Dragons Restaurant, Destination Dining), renovate the Chairman's Club to further enhance service quality, establish core product strength for a natural competitive advantage.

The bank revised down the company's net income forecast for 2024-2026 to 28.74/31.04/32.66 billion Hong Kong dollars; the forecast for adjusted property EBITDAR for 2024-2026 is 9/9.59/10.02 billion Hong Kong dollars, with current stock prices corresponding to 7.9/7.4/7.1 times EV/adjusted property EBITDAR. The bank's target price is 8.2 Hong Kong dollars, maintaining a 'buy' rating.