Haitong International has issued a research report maintaining an "Outperform" rating on GALAXY ENT (00027). The institution forecasts the company's net revenue for 2026-2027 to be HKD 52,483 million / HKD 56,712 million, representing year-on-year growth of 6.6% and 8.1% respectively. Gross gaming revenue is projected to be HKD 52,696 million / HKD 56,856 million, with year-on-year increases of 7.2% and 7.9%. Adjusted EBITDA is estimated at HKD 15,067 million / HKD 16,478 million, resulting in adjusted EBITDA margins of 28.7% and 29.1%. Using comparable company valuations, the bank applies a 2026E EV/EBITDA multiple of 10x, corresponding to a market capitalization of HKD 206.88 billion and a target price of HKD 47.3. The main points from Haitong International are as follows:
GALAXY ENT reported its Q4 2025 results, achieving net revenue of HKD 13.83 billion, a year-on-year increase of 22.5%. Adjusted EBITDA reached HKD 4.30 billion, rising 32.7% year-on-year, with a corresponding adjusted EBITDA margin of 31.1%, up 2.4 percentage points. Overall, the Q4 2025 results were in line with market expectations.
A nearly 30% year-on-year increase in gaming revenue drove the company's overall revenue growth. Net revenue was HKD 13.83 billion, up 22.5% year-on-year and 13.7% quarter-on-quarter. Gaming and non-gaming businesses contributed HKD 11.36 billion and HKD 1.74 billion respectively, with year-on-year changes of +28.4% and +3.8%, and quarter-on-quarter changes of +17.1% and +0.5%. These segments accounted for 82% and 13% of total revenue respectively. By property, Galaxy Macau and StarWorld Macau reported net revenues of HKD 11.77 billion and HKD 1.28 billion, with year-on-year changes of +28.8% and -1.1%, and quarter-on-quarter changes of +16.7% and +1.0%, accounting for 85% and 9% of the total.
VIP business showed strong growth, driven by improved win rate and betting volume. Gross gaming revenue reached HKD 13.95 billion, a 26.5% year-on-year increase, surpassing the industry average growth of 15%, and a 14% increase quarter-on-quarter. VIP, mass market, and slot machine segments reported gross revenues of HKD 3.11 billion, HKD 10.01 billion, and HKD 0.83 billion respectively, with year-on-year changes of +102.0%, +15.0%, and +6.4%, and quarter-on-quarter changes of +52.1%, +5.8%, and +12.5%. The increase in gross gaming revenue is primarily attributed to a higher-than-usual VIP net win rate. The actual net win rate for Q4 2025 was 5.14%, compared to 3.0% in Q4 2024 and a normalized rate of 3.05%.
The elevated net win rate contributed to an improvement in adjusted EBITDA profitability. Adjusted EBITDA reached HKD 4.30 billion, increasing 32.7% year-on-year and 28.6% quarter-on-quarter. The adjusted EBITDA margin was 31.1%, up 2.4 percentage points year-on-year and 3.6 percentage points quarter-on-quarter. Galaxy Macau and StarWorld Macau reported adjusted EBITDA of HKD 4.02 billion and HKD 0.36 billion, with year-on-year changes of +41.4% and -1.9%, and quarter-on-quarter changes of +31.0% and -3.5%. Their corresponding adjusted EBITDA margins were 34.1% and 27.9%, changing by +3.1/-0.2 percentage points year-on-year and +3.7/-1.3 percentage points quarter-on-quarter. In Q4 2025, the higher net win rate in gaming operations increased adjusted EBITDA by approximately HKD 731 million. After normalizing the net win rate, adjusted EBITDA would be HKD 3.57 billion, representing year-on-year growth of 9% and quarter-on-quarter growth of 7%.
Market share increased both year-on-year and quarter-on-quarter. The company's market share in Q4 2025 was 21.8%, up 1.6 percentage points from 20.2% in Q3 2025 and 2.0 percentage points from 19.8% in Q4 2024.
Risk factors include macroeconomic growth falling below expectations, potential tightening of Macau's gaming regulatory policies, and intensified competition in overseas gaming markets.