Haitong International issued a research report stating that GALAXY ENT (00027) reported first-quarter results in line with expectations, with its premium business continuing to grow. In the first quarter, the company achieved net revenue of HK$12.4 billion, a year-on-year increase of 10.7%. Adjusted EBITDA reached HK$3.58 billion, up 8.5% year-on-year, corresponding to an adjusted EBITDA margin of 28.8%, a slight decrease of 0.6 percentage points from the previous year. Overall, the first-quarter performance met market expectations. Based on comparable company valuations, the firm applied an 8.5x EV/EBITDA multiple for GALAXY ENT's 2026 estimates, lowering the target price from HK$47.3 to HK$41.5 while maintaining an "Outperform" rating.
GALAXY ENT's gross gaming revenue for the first quarter amounted to HK$12.73 billion, a year-on-year increase of 16.4%, surpassing the industry's growth rate of 14%. During the period, the premium business continued to expand, with VIP and premium mass segments currently accounting for 53% of GGR. Within the mass market segment, the ratio of base mass to premium mass is approximately 55:45. GALAXY ENT's market share for the first quarter was 19.9%, representing a quarter-on-quarter decline of 1.8 percentage points but a year-on-year increase of 0.4 percentage points, returning to a normalized level.
The report noted that during the May Day Golden Week, GALAXY ENT's hotels, dining, and visitor traffic demonstrated strong performance. The second fiscal quarter's results may be impacted by the World Cup in June and July. The company is adding events such as concerts and UFC matches to attract customer traffic. Haitong International forecasts GALAXY ENT's net revenue for 2026, 2027, and 2028 to be HK$51.723 billion, HK$56.205 billion, and HK$61.62 billion, representing year-on-year growth rates of 5%, 8.7%, and 9.6%, respectively. Adjusted EBITDA is projected to be HK$14.72 billion, HK$16.019 billion, and HK$17.428 billion for those years, with adjusted EBITDA margins of 28.5%, 28.5%, and 28.3%, respectively.