Phase 4 of Galaxy Macau, the flagship property of Macau casino operator Galaxy Entertainment Group Ltd, “will feature luxury hotels” with about “1,500 rooms, revised from 2,500 initially planned, to accommodate larger suites,” said brokerage Jefferies Hong Kong Ltd.
The Thursday commentary followed analyst discussion with management after the casino group issued its unaudited performance highlights for the three months to September 30.
“Construction is progressing, with completion targeted for 2027,” wrote analysts Anne Ling and Jingjue Pei, citing the casino firm’s management.
Aside from hotel brands that are new to Macau, Phase 4 (pictured) will also include “120 retail units, a 5,000-seat mid-size theatre, a water resort, and expanded gaming facilities that can host up to 400 tables, further strengthening Galaxy Entertainment’s premium positioning,” noted the institution.
According to the brokerage, Galaxy Entertainment’s management views Broadway, next door to Galaxy Macau, “as a land bank, with opportunities to be developed into a substantial addition to Galaxy [Macau]”.
It added: “Separately, management believes it will take more time – originally targeted for one to two years – for StarWorld to complete its transformation.”
In early 2024, the company said it was considering “major upgrades” at the StarWorld Hotel property on the city’s peninsula, including “the main gaming floor, the lobby experience and increasing food and beverage options”.
On Thursday, Galaxy Entertainment reported third-quarter adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of just above HKD3.34 billion (US$429.7 million), up 13.6 percent from a year earlier.
Net revenue in the three months to September 30 rose 14.0 percent year-on-year, to HKD12.16 billion.
Galaxy Entertainment’s third-quarter investor call “underscored strong recovery in premium segments despite typhoon-related costs” in September, noted the Jefferies team.
As per the casino firm’s management, the 33-hour shutdown of Macau’s casinos due to the passage of Super Typhoon Ragasa in late September, led to direct costs of HKD30 million and a total estimated impact of up to HKD140 million” for Galaxy Entertainment.
The brokerage said however that the company’s third-quarter results were “in line” with expectations, with management saying that the soft opening of the Capella hotel at Galaxy Macau in May had “helped attract top VIP and super-premium players, some of whom have arranged multiple trips to Macau, thereby growing the high-end segment”.
The Jefferies’ analysts said Galaxy Entertainment expects a “solid performance” in the final quarter of 205, “with momentum from Golden Week and premium customer demand likely to carry into this quarter”.
“October and early November saw a strong recovery, especially in the premium and VIP segments,” stated the analysts quoting commentary on the call.
The casino firm’s management “targets a 20 percent to 22 percent market share before the opening of Phase 4, leveraging new premium offerings and strong performance in both mass and VIP segments,” the analysts added.
