MGM China reported 3Q24 net revenue of HK$7.2bn and adjusted Ebitda of HK$1.98bn, higher than our expectation, thanks to better-than-expected performance of premium mass business. We raise EPS forecast from HK$0.96 to HK$1.18 in 24E, from HK$1.06 to HK$1.19 in 25E, and from HK$1.15 to HK$1.28 in 26E. We raise target price from HK15.4 to HK15.5. With 54% upside potential, we maintain Buy rating.

3Q24 results. The company's total gross gaming revenue (GGR) increased 21% YoY but declined 10% QoQ, representing 13% increase over 2019 level. Mass GGR surpassed 2019 by 71%, slot GGR surpassed 2019 by 13%, and VIP GGR recovered to 29% of 2019 level. Total Ebitda exceeded 2019 by 28%, in which MGM Cotai exceeded 2019 by 71% and MGM Macau recovered 94% of 2019 level.

Future projects. The renovation projects at MGM Macau such as villas and events centre are expected to finish by the middle of next year. The conversion of 160 standard rooms at MGM Cotai into c.60 suites is expected to be completed by the end of next year. The new Poly MGM at MGM Macau will launch its first exhibition on November 2. MGM 2049, produced and directed by Yimou Zhang, is scheduled to open on December 15 at MGM Cotai.

Maintain Buy. We raise target price from HK15.4 to HK15.5. With 54% upside potential, we maintain Buy rating.

Risks: Lower-than-expected revenue recovery.