MGM China set to report strong Q4 results amid post-COVID recovery

MGM China is expected to report solid financial results for Q4 2024, with Adjusted EBITDA projected to reach HK$2 billion ($250 million), marking a 5% increase from the previous quarter. This growth reflects continued momentum as the company capitalizes on its post-COVID recovery. 

According to investment bank Jefferies, Gross Gaming Revenue (GGR) for the quarter to rise 7% quarter-on-quarter to HK$8.5 billion ($1.1 billion). MGM China’s market share is estimated at 15.8%, a slight improvement from 14.8% in Q3 2024, though down from a high of 17.1% in Q1 2024.

Despite the strong revenue growth, the company’s Adjusted EBITDA margin stands at 27%, slightly behind GGR growth. This is attributed to increased operating expenses, which have impacted profitability at a slightly slower pace than revenue gains.

MGM China’s leadership attributes the strong results to its strategic focus on premium mass customers and its ongoing recovery from the pandemic. President and Executive Director, Kenneth Feng, noted that the company’s “deep understanding” of this high-value segment has been a key driver of its record-breaking revenue and EBITDA performance in 2024.

The company has also launched new attractions, including the Poly MGM Museum at MGM Macau and the Macau 2049 residency show at MGM Cotai, which are expected to boost its appeal among tourists and locals alike.

Despite the positive outlook for Q4 2024, analysts at Jefferies have cautioned that MGM China could face challenges in the first half of 2025 due to historical trends and rising competition in the Macau gaming market. As other concessionaires introduce new high-end suite products and implement smart table technology, the competitive landscape is expected to intensify.

However, Jefferies analysts Anne Ling and Jingjue Pei have maintained a “BUY” rating on MGM China’s stock, citing the company’s strong fundamentals and its ability to leverage premium customer insights. They noted that the forecast 5% quarter-on-quarter growth in Adjusted EBITDA at a 27% margin would likely be slower than GGR growth, largely due to higher operating costs.

MGM China is scheduled to announce its Q4 2024 results on February 13, 2025.