Affected by the epidemic, income regressed and remained profitable throughout the year. Affected by the spread of the global COVID-19 epidemic, Golden World Holdings temporarily suspended its business from April 2 to July 7 last year, and its operation is facing challenges. Total gaming revenue in 2020 was US $869 million, 50% retrogression compared with 1.76 billion in 2019. VIP transcoding / hall betting / slot machine bets were respectively US $2.26 billion, down 52%, by 41%, by 48%, and by 61% compared with the same period last year. Net profit was US $102 million, down 80% from the same period last year, but remained profitable and outperformed Macau counterparts. From a month-on-month perspective, the company's EBITDA and net profit increased by 99% and 297% respectively in the second half of the year compared with the first half. Management announced plans to pay a final dividend of 1.88 cents per share, with an annual dividend rate of 92%. Since the company's IPO in 2006, the gold industry has paid a cumulative dividend of more than $1.5 billion.
The business situation improved in the second half of the year. After the resumption of casino business on July 8, 2020, the average daily gaming revenue of the gold casino mass market and VIP market divisions recovered to 95% and 69% of that in the first quarter of 2020, a relatively rapid recovery, mainly due to the strong gambling demand of foreign residents living in Cambodia and tourists from East Asia (Chinese mainland, South Korea and Taiwan of China) also visited NagaWorld under the epidemic. The company actively promoted the shift of spending power customers from midfield to high-end midfield consumption, driving a rebound in betting volume. The average daily betting volume in the fourth quarter increased 23% to $3.91 million compared with the third quarter, also exceeding the amount of bets made before the casino was shut down in the first quarter of 2020.
The epidemic remains the biggest uncertainty and dawn is expected to come. On March 1, 2021, the company announced that due to the impact of a new round of epidemic, the company suspended business again, but this suspension was initiated by the company on its own initiative, coupled with the fact that the Cambodian government has more experience in fighting the epidemic, and the introduction of the vaccine has gradually brought the global COVID-19 epidemic under control. we expect the suspension time to be shorter than that in 2020. Drawing on the impact of last year's epidemic on the company's performance, it is estimated that the company will remain profitable this year, EBITDA and profits will improve compared with the same period last year, and the pace of recovery will accelerate in the second half of the year.
Cash is abundant, financial policy is sound, and major shareholders increase their holdings. As of December 31, the company had cash and deposits of $452 million and a debt / EBITDA ratio of 0.7. Dr. Zeng Liqiang, a major shareholder, is optimistic about the future of the company. He bought a total of US $76 million of shares in the secondary market in 2020, and also participated in the subscription of the company's preferred notes due in 2024.
Investment advice: we predict that the company's income from 2021 to 2023 will be US $1.23 billion, an increase of 39.9%, 41.1%, 19.4%, and net profit of US $2.7 million, 400.00 million, and 161.5%, 50.5%, 33.5% respectively. Based on the relative size of the gold sector in the Hong Kong stock gaming sector and the market environment in Cambodia, EBITDA valued the target EV/EBITDA at 13 times the target price of HK $13.6, maintaining a "buy" rating.
Risk tips: the impact of the global epidemic on the tourism and gambling industry, the increased risk of competition among large casinos in Southeast Asia, the risk of postponement of the third phase of the gold project, and the risk that the time and income of the Russian project are not up to expectations.