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Galaxy Entertainment Group Ltd 00027

Morningstar Rating
HKD 39.85 −0.45 (1.12%)
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Company Report

Galaxy Earnings: Tepid Performance, but Taking Action to Strengthen Long-Term Competitiveness

Galaxy’s first-quarter results were slightly disappointing, with a market share loss in gross gaming revenue to 17.4% from 17.7% a quarter ago and with luck-adjusted EBITDA 2% below Bloomberg consensus. This was partly due to a temporary disruption of customer traffic in January and early February, attributable to Galaxy Macau’s gaming floor reconfigurations. On a positive note, management is seeing improvements in quarter-to-date performance, with the GGR market share rising above the levels of the past two quarters and mass volume hitting 120% of its 2019 level during the May Golden Week, up from 105% in the first quarter. We are encouraged that Galaxy has taken strategic action to regain market share by rolling out more products and expanding the sales and hosting teams.

Price vs Fair Value

00027 is trading at a 558% premium.
Price
HKD 39.85
Fair Value
HKD 32.00
Uncertainty
High
1-Star Price
HKD 41.50
5-Star Price
HKD 99.80
Economic Moat
Ydzzt
Capital Allocation
Psnjxfxvx

Bulls Say, Bears Say

Bulls

Macao's gaming sector is well-positioned to benefit from China's reopening, which will allow the sector to restore its profitability meaningfully.

Bears

Galaxy will still face harsher license-renewal terms such as shorter license duration, requirement of nongaming investment, and 1% increase in gaming tax.

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News

Trading Information

Previous Close Price
HKD 40.30
Day Range
HKD 39.3040.10
52-Week Range
HKD 33.3557.60
Bid/Ask
HKD 39.80 / HKD 39.85
Market Cap
HKD 174.29 Bil
Volume/Avg
10.6 Mil / 13.3 Mil

Key Statistics

Price/Earnings (Normalized)
23.36
Price/Sales
4.88
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

Galaxy Entertainment is one of six casino licenseholders in Macao. Its major properties include Starworld casino in the Macao Peninsula, and Galaxy Macau phases 1, 2 and 3 in Cotai, with a hotel capacity of approximately 5,564 rooms as of the end of 2023.
Sector
Consumer Cyclical
Industry
Resorts & Casinos
Stock Style Box
Large Growth
Total Number of Employees
20,400

Competitors

Valuation

Metric
00027
01928
02282
Price/Earnings (Normalized)
23.3628.8519.98
Price/Book Value
2.46
Price/Sales
4.883.162.21
Price/Cash Flow
18.9412.6811.61
Price/Earnings
00027
01928
02282

Financial Strength

Metric
00027
01928
02282
Quick Ratio
1.501.210.48
Current Ratio
1.531.230.50
Interest Coverage
34.442.392.51
Quick Ratio
00027
01928
02282

Profitability

Metric
00027
01928
02282
Return on Assets (Normalized)
8.94%6.92%9.17%
Return on Equity (Normalized)
11.10%
Return on Invested Capital (Normalized)
9.33%12.94%17.23%
Return on Assets
00027
01928
02282
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Resorts & Casinos Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
LVS
Las Vegas Sands CorpSltmgsnvzdWymxhl$34.9 Bil
GXYEF
Galaxy Entertainment Group LtdCzfnwlw$23.1 Bil
GXYYY
Galaxy Entertainment Group Ltd ADRCzzclj$22.6 Bil
SCHYF
Sands China Ltd Shs Unitary 144A/Reg SMspcm$21.3 Bil
SCHYY
Sands China Ltd ADRQtqsxr$21.3 Bil
MGM
MGM Resorts InternationalCrqlhlljTrbvm$12.6 Bil
WYNN
Wynn Resorts LtdGwxckssdQfckgkw$10.7 Bil
CZR
Caesars Entertainment IncBjhdzcspxNcs$7.5 Bil
MLCO
Melco Resorts and Entertainment Ltd ADRLgxqsvfkWggvvc$3.8 Bil
PENN
PENN Entertainment IncNrttgfhrBtpz$2.4 Bil

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