Goldman Sachs issued a report stating that it had previously anticipated a potential significant decline in SJM Holdings' (00880.HK) performance in the fourth quarter of 2025. This reflects operational disruptions and gross gaming revenue losses due to the closure of satellite casinos, additional costs from taking over approximately 3,000 employees, and ongoing volatility in the performance of the Grand Lisboa Palace integrated resort.
The report noted that the group’s EBITDA for the fourth quarter of last year fell by 24% quarter-on-quarter to HKD 670 million, compared to HKD 881 million in the third quarter of 2025, which was in line with the firm's expectations but below market estimates ranging from HKD 684 million to HKD 900 million. This was primarily due to higher daily operating expenses and an increase in rebates and promotional expenses as a percentage of gaming revenue, rising from 8.5% in the third quarter to 9.3%.
Based on the financial performance, Goldman Sachs has lowered its EBITDA forecasts for SJM Holdings’ fiscal years 2026 and 2027 by 1%, while slightly reducing its target price from HKD 2.80 to HKD 2.70. The stock is rated as 'Neutral,' and the firm expressed a stronger preference for Galaxy Entertainment Group (00027.HK) and Sands China (01928.HK).
