S&P Global Ratings said in a recent memo that it expects Hong Kong-listed Cambodian casino operator NagaCorp Ltd to achieve “3 percent to 8 percent growth in adjusted revenue for 2026-2027”. In a May commentary, the ratings agency had said it expected the firm’s earnings to rise by about 5 percent to 6 percent over the same period.
The financial institution stated in its latest note that the casino company remains at the upper end of the speculative-grade category, with a ‘B+/Stable/–’ assessment. Its fresh memo did not constitute a rating action, it added.
It nonetheless viewed NagaCorp as “vulnerable” for business risk, and “intermediate” for financial risk.
According to S&P Global, the company’s key risks include “low visibility on funding strategy for future investments and dividends”. Also mentioned were “limited revenue and geographical diversity,” and “competition from new and existing gaming markets,” including “Malaysia and Macau”.
“Key strengths” for NagaCorp encompassed being a “monopoly gaming operator in Phnom Penh until 2045” at its NagaWorld property (pictured). The monopoly applies for a radius of 200 kilometres (124.3 miles) around the Cambodian capital.
Another strength was operating in a “low‑gaming tax jurisdiction”.
S&P thinks NagaCorp will be “resilient” in its gaming business, but with performance staying below pre-pandemic levels.
“We project 3 percent to 8 percent growth in adjusted revenue for 2026-2027. The company’s gross gaming revenue [GGR] increased 27 [percent to US$692 million],” added the institution, referring to NagaCorp’s full-year 2025 results, issued in March.
S&P Global also observed: “Revenue is dominated by gaming, with non-gaming revenue accounting for less than 5 percent of total revenue in 2025.
“We believe this high concentration in a volatile gaming sector in an emerging economy heightens Naga’s business risk.”
The ratings house suggested the operation would nonetheless continue to benefit from a “captive domestic market of expatriates” and the gradual recovery of Cambodia’s inbound tourism business.
“We believe growth will continue on increasing flight capacity to and from China,” said S&P Global.
It observed that in 2025, mass-market play had powered growth, with segmental revenue rising 23 percent to US$485 million.
S&P Global noted that NagaCorp’s reported revenue and earnings before interest, taxation, depreciation, and amortisation (EBITDA) in 2025 were “only 41 percent and 60 percent of 2019 levels,” respectively.
It stated: “This was due to the elimination of the referral VIP segment, primarily junkets. Junkets accounted for about 70 percent of Naga’s gross gaming revenue in 2019 and are unlikely to return.” That would “weigh on the company’s business strength,” the institution added.
“China’s crackdown” on junket activity “has reduced contributions from the referral VIP segment, which previously drove a significant part of the company’s business,” it added.
Disciplined spending
Though S&P Global asserted that NagaCorp’s “healthy balance sheet” provided a “downside cushion”.
It said the casino group had been managing cash flow by limiting dividends and capital expenditure (capex) since 2022, “keeping leverage low while building a sizeable cash balance”. NagaCorp had also paid off a US$70-million shareholder loan in May 2026.
“We forecast a ratio of debt to EBITDA of around 0.3 times for 2026-2027,” said the ratings agency.
S&P Global stated, referring to a paused extension for NagaWorld: “The company is still reassessing the scale of its Naga 3 project against the current business environment. We expect it to resume expenditure on the project in 2027. Termination of a shareholder funding agreement for Naga 3 in December 2025 also means Naga may rescale the US$3.5-billion project.”
S&P Global suggested that – depending on the revised investment amount – the company could fund Naga 3 “mainly with internal cash flow or via external markets”.
It observed NagaCorp had resumed dividends in 2025 at a 30 percent payout ratio.
“We expect the company to gradually increase shareholder returns toward historical levels of 60 percent,” the ratings house stated.
It suggested NagaCorp’s 2026 capex could be “about US$170 million in 2026, before an increase to about US$380 million in 2027 for Naga 3, amid annual shareholder returns of US$100 million to US$120 million”.
If NagaCorp were to accelerate Naga 3 capex or pursue “large-scale investments amid aggressive shareholder distributions that erode its cash balance, its credit quality could sharply deteriorate,” S&P Global observed.
The institution also noted of NagaCorp, in terms of resilience to any further external shocks: “The company lacks strong relationships with a diversified group of lenders, including global banks, and we believe it is unable to absorb high-impact, low-probability events without the need to refinance.”
