The analyst rating for SJM Holdings (00880.HK) is maintained at "Hold" by HSBC Global Research due to the following reasons:
1. Performance in Line with Expectations: The company's 3Q25 results were broadly in line with expectations, indicating stability in its financial performance.
2. Self-Operated Casinos Outperforming: The performance of self-operated casinos exceeded expectations, which is a positive sign for the company's core operations.
3. Weak Satellite Casino Results: The overall performance was offset by weaker results from satellite casinos, which have seen a decrease in market share from 5.1% to 3.9% as the company winds down this segment.
4. Potential for Market Share Recovery: A new agreement allowing SJM Holdings to directly contact satellite casino customers starting in November is expected to help recover some of the lost market share, suggesting potential for future growth.
5. Target Price and Upside Potential: HSBC has set a target price of $2.6, and if the transition of satellite casinos proceeds smoothly, there is potential for earnings upside.
These factors contribute to the decision to maintain a "Hold" rating, reflecting cautious optimism about the company's future performance.
