Morgan Stanley has released a research report forecasting a 17% year-on-year increase in Macau's Q4 gaming revenue, with industry EBITDA expected to grow by 15%, surpassing market consensus. The firm maintains MGM China (02282) and Galaxy Entertainment (00027) as top picks, anticipating that Q4 performance will drive upward revisions in market earnings estimates.

The report projects double-digit growth in gaming revenue for both Q4 and Q1 2025, supported by potential dividend increases, which could further bolster valuations of gaming operators. Morgan Stanley expects Q4 property EBITDA for gaming operators to rise 15% quarter-on-quarter and 6% year-on-year, with possible margin improvements despite high operating costs.

Galaxy Entertainment (00027) received an "Equal Weight" rating due to its lower dividend yield and higher EV multiples, with its target price adjusted downward from HK$44 to HK$43. Meanwhile, Sands China (01928) was given an "Overweight" rating, reflecting its push for greater market share and potential dividend growth, with its target price maintained at HK$23.