SJM HOLDINGS(00880) 第一上海证券·2024-03-17 16:00Investment Rating - The report maintains a Buy rating for Macau Gaming Holdings Limited (880) with a target price of HKD 3.28, representing a 41.4% upside from the current price [1] Core Views - The company's EBITDA turned positive in Q4 2023, reaching HKD 70 million, a 23.8% increase QoQ, recovering to 59.1% of 2019 levels [1] - The Grand Lisboa Palace project achieved an EBITDA of HKD 2 million, marking its first profitable quarter [1] - The company's market share remained stable at 12.0% in Q4 2023, with potential for long-term growth to 4-6% as product offerings expand and customer quality improves [1] Financial Performance - Gross gaming revenue in Q4 2023 increased by 9.0% QoQ to HKD 6.74 billion, recovering to 65.7% of 2019 levels [1] - VIP gaming revenue grew by 52.2% QoQ, mass gaming revenue by 8.2%, while slot machine revenue declined by 2.0% [1] - Non-gaming revenue decreased by 6.9% QoQ, accounting for 2.7% of total revenue [1] - Net loss narrowed to HKD 3.4 billion in Q4 2023, with daily operating expenses increasing by 2.0% to HKD 19.3 million [1] Segment Performance - Grand Lisboa saw a 16.4% QoQ increase in gaming revenue to HKD 1.71 billion, recovering to 52.5% of 2019 levels [1] - Other self-operated properties reported a 1.0% decline in gaming revenue to HKD 1.17 billion, recovering to 70.9% of 2019 levels [1] - Satellite casinos experienced a 10.8% increase in gaming revenue to HKD 2.55 billion, recovering to 49.3% of 2019 levels [1] Future Outlook - The company is implementing a centralized management system to improve operational efficiency and focus on growth and profitability [1] - The use of RFID chips is expected to enhance gaming speed, security, and customer data analysis, helping to identify high-quality customers [1] - The recovery of Macau's gaming market is expected to benefit the company, with potential synergies between Grand Lisboa and Grand Lisboa Palace [1] Financial Projections - Net revenue is projected to grow by 20.1% in 2024 to HKD 25.96 billion, with further growth of 9.9% in 2025 and 9.0% in 2026 [1] - EBITDA is forecasted to increase by 110.6% in 2024 to HKD 3.64 billion, with continued growth in subsequent years [1] - Net profit is expected to turn positive in 2024 at HKD 667 million, with significant growth in 2025 and 2026 [1] Valuation - The target price of HKD 3.28 is based on a 10.4x 2024 EBITDA valuation for the company's integrated resorts, self-promoted properties, and satellite casinos [1]