Events to boost Galaxy Macau share gains in 4Q: Seaport

Nov 08, 2024 Newsdesk Latest News, Macau, Top of the deck  

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Casino operator Galaxy Entertainment Group Ltd “lost circa 40 basis points” quarter-on-quarter to 18.7 percent, in terms of share of gross gaming revenue (GGR) in the Macau market, suggested a Thursday note from Seaport Research Partners.

“While Galaxy [Entertainment] experienced a poor September, reflected in the third-quarter results, fourth quarter was off to a very strong start with Galaxy [Entertainment] achieving over 20 percent market share, although we expect this to drop in November and December,” wrote analyst Vitaly Umansky in the memo.

Galaxy Entertainment reported on Thursday third-quarter adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of HKD2.94 billion (US$378.3 million), up 6.2 percent from the prior-year period, but down 7.4 percent sequentially.

The company update said the group’s total GGR for the three months to September 30 was HKD10.15 billion, up 16.1 percent year-on-year, but down 1.8 percent quarter-on-quarter.

Galaxy Entertainment’s third-quarter results were “light on flat market share quarter-on-quarter and higher player reinvestment,” observed Mr Umansky.

“Player reinvestment increased during the quarter – following a jump in the second quarter – resulting in net gaming up 10.6 percent year-on-year, down 4.7 percent quarter-on-quarter,” he added.

The brokerage estimates Galaxy Entertainment’s reinvestment to have “increased over 200 basis points quarter-on-quarter as a percentage of mass-table GGR”.

Mr Umansky noted that while player reinvestment has risen in Macau, “especially at the upper end of premium mass,” Galaxy Entertainment’s management “continues to believe the trend has now stabilised, echoing other operators” in Macau.

The casino firm will in likelihood gain market share in Macau in the final quarter this year, suggested Seaport.

The Golden Week holiday period at the start of October “was strong in the market, and Galaxy [Entertainment] in particular, with mass drop up over 50 percent year-on-year and property visitation at Galaxy Macau nearly doubling,” noted Mr Umansky.

“Galaxy [Entertainment]‘s competitive advantage at Galaxy Macau remains its entertainment/event offerings, scale, service, and product offering. Large music performances drive outsized business with the fourth-quarter schedule supporting Galaxy Macau share gains,” he stated.

The analyst added: “With a re-focused marketing effort and smart digital tables up and running before Chinese New Year, we expect share gains to continue at Galaxy Macau over the next few quarters and into 2025.”

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