The Zhitong Finance App learned that CICC released a research report stating that it will maintain Galaxy Entertainment's (00027) EBITDA forecasts for 2026 and 2027. The company's current stock price corresponds to 9 times the 2026 EV/EBITDA (treating financial assets as cash). The bank maintains an outperforming industry rating and target price of HK$38.00, which corresponds to 10 times the 2026 EV/EBITDA (treating financial assets as cash). The target price has 11% upside compared to the current stock price.
CICC's main views are as follows:
2Q26 results are in line with this forecast
Galaxy Entertainment announced its 2Q26 results: revenue of HK$11.835 billion, down 2% year on year and 5% month on month, returning to 90% of the 2Q19 level; adjusted EBITDA was HK$3.38 billion, down 5% year over month, returning to 78% of the 2Q19 level, which is basically in line with the bank's expectations of HK$3.367 billion. The bank believes that Galaxy Entertainment's performance was mainly due to the increase in market share from 19.9% in 1Q26 to 20.3% in 2Q26, as well as control of operating costs.
Development trends
After the 2026 World Cup schedule ended, the high-end business sector (VIP business and high-end midfield) rebounded in late July and August 2026; the overall level of rebates in the industry remained competitive but stabilized; the bank believes that the company's shareholder returns will continue its dividend-oriented strategy: it has announced an interim dividend of HK$0.90 per share, with a corresponding payout rate of about 75%. However, the company did not promise a fixed dividend amount or dividend ratio per share; due to geopolitical disturbances and conflict, Macau, China and Hong Kong, China are expected to benefit as tourist destinations; the complete renovation of the Star Hotel gaming area and hotel guest rooms is expected to be completed in 1Q27.
Risk warning: New property sales fall short of expectations; construction progress falls short of expectations; increased competition may cause loss of market share.