The Zhitong Finance App learned that Lyon released a research report saying that the Macau gaming industry was mainly dragged down by a 3.8% year-on-year decline in gaming revenue. The industry's EBITDA is expected to drop 11% year-on-year to US$1,839 million in the third quarter. The bank maintains a neutral view over the next six months, believing that with only a slight increase in gaming revenue, there is limited room for profit margin expansion. In terms of individual stocks, the bank continued to rank Galaxy Entertainment (00027) as the only preferred stock in the industry, maintaining a “outperforming the market” rating and a target price of HK$39.7; at the same time, it raised the rating of Aobo Holdings (00880) from “outperforming the market” to “holding”, maintaining a target price of HK$1.4.
Lyon pointed out that the VIP room win rate in the third quarter was higher than normal, which should mitigate the adverse factors faced by profit margins, but the bank believes that this support is only temporary.
On the side of Aobo Holdings, considering the recent decline in stock prices, the bank raised its rating to “hold”, and also lowered the company's 2026 EBITDA forecast by 3%, increasing this year's net loss forecast from 159 million yuan to 247 million yuan. The bank believes that the growth of the Shanghai Lisboa business and debt reduction are still the two major priorities of Aobo Holdings. Due to the high net debt-to-EBITDA ratio, the company is not expected to pay any dividends in the 2026-2028 fiscal year.
Furthermore, Lyon lowered the target price of Melco Entertainment (MLCO.US) from $5.3 to $5, maintaining the “outperforming the market” rating.