MELCO INT'L DEV(00200) 华泰证券·2024-08-16 04:03Investment Rating - The report maintains a "Buy" rating for Melco International Development with a target price of HKD 5.60, corresponding to a 2025 EV/EBITDA of 7.0x [6][8]. Core Insights - Melco's Q2 2024 net revenue was USD 1.16 billion, a 4.3% increase quarter-on-quarter, while adjusted property EBITDA was USD 303 million, up 1.3% quarter-on-quarter, recovering to 68% of Q2 2019 levels [2][8]. - The report predicts Melco's gaming gross revenue (GGR) for 2025 and 2026 to be HKD 36.991 billion and HKD 40.293 billion, respectively, recovering to 79% and 86% of 2019 levels [2][8]. - The report highlights that Melco's GGR recovery in Macau is lagging behind the industry average, with the company facing potential peak risks in its mid-market and slot machine segments [2][8]. Financial Projections - The projected operating revenue for Melco is expected to reach HKD 34.823 billion in 2024, HKD 38.400 billion in 2025, and HKD 42.344 billion in 2026, reflecting a growth rate of 17.9%, 10.3%, and 10.3% respectively [5]. - The adjusted net profit attributable to the parent company is forecasted to be HKD 1.014 billion in 2024, HKD 1.822 billion in 2025, and HKD 1.631 billion in 2026, indicating a significant recovery from previous losses [5]. - The report anticipates an EBITDA margin of 26.9% in 2025, slightly decreasing to 26.5% in 2026, compared to 27.8% in 2019 [8]. Market Performance - In Q2 2024, Melco's Macau GGR was USD 1.223 billion, recovering to 70% of Q2 2019 levels, compared to the industry average of 77% [2][8]. - The report notes that while the overall visitor numbers to Macau are increasing, Melco's performance in the VIP segment remains below industry standards, with VIP revenue recovering to only 25% of Q2 2019 levels [2][4]. - The report emphasizes that Melco's focus on non-gaming attractions, such as high-end dining and family-friendly entertainment, is crucial for its strategy to adapt to Macau's evolving market [3][8].