UBS Anticipates MGM CHINA (02282.HK) Property Enhancements Will Support Market Share This Year; Maintains Buy Rating

The analyst rating from Goldman Sachs is influenced by concerns regarding the increased royalty fee ratio paid to the US parent company, which could negatively impact MGM CHINA's EBITDA and free cash flow. Despite these concerns, CLSA views the current price level as attractive, believing that the recent stock price correction is overdone. They maintain a "Buy" rating with a target price of $18.4, indicating confidence in the stock's potential despite the recent downturn.

The analyst rating from Jefferies for MGM CHINA is a "Buy" with a target price of $19. The reasoning behind this rating is based on the company's finalized brand licensing agreement with its parent company, MGM Resorts International. Although the broker anticipates that the increase in brand licensing fees will lead to a 6% decrease in MGM CHINA's 2026 adjusted EBITDA and a 10% drop in net profit, they still see potential in the stock. The report also notes that if the company maintains a 50% dividend payout ratio, the decrease in earnings could lead to a review of the dividend policy, but this does not deter the overall positive outlook.

The analyst rating for MGM CHINA as Overweight by Morgan Stanley is based on the company's increased market share in October, which is viewed as beneficial for the entire sector. Additionally, the positive growth in Macau's GGR (Gross Gaming Revenue) for November, which exceeded market expectations, supports a favorable outlook for the gaming industry in the region.