Citi Maintains Buy Rating on Galaxy Entertainment Following In-Line Q4 Results

Stock News
Feb 27

Citigroup has issued a research report reiterating a "Buy" rating on GALAXY ENT (00027) with a target price of HK$54. The company reported a 22% year-on-year increase (14% quarter-on-quarter) in net revenue for the fourth quarter of 2025, reaching HK$13.833 billion. Adjusted EBITDA rose 33% year-on-year (29% quarter-on-quarter) to HK$4.296 billion, largely aligning with the bank's forecast of HK$4.236 billion and exceeding market expectations of HK$4.183 billion by approximately 3%. The bank estimates the company's market share grew by about 1.6 percentage points quarter-on-quarter in Q4 2025 to around 21.8%. The adjusted EBITDA margin expanded by 2.4 percentage points year-on-year (3.6 percentage points quarter-on-quarter) to 31.1%. The group recorded an EBITDA benefit of HK$731 million in Q4 2025 due to favorable gaming luck. Normalized adjusted EBITDA stood at HK$3.565 billion, up 9% year-on-year and 7% quarter-on-quarter. VIP gaming revenue surged 102% year-on-year (52% quarter-on-quarter) to HK$3.109 billion, driven by a 17% year-on-year increase in gaming volume and a win rate rising to 5.14%. Mass market table gaming revenue increased 15% year-on-year (6% quarter-on-quarter) to HK$10.011 billion, benefiting from a 10% year-on-year rise in volume and a win rate improving to 28.4%. The board proposed a final dividend of HK$0.8 per share, bringing the total dividend for the 2025 fiscal year to HK$1.5 per share, representing a payout ratio of approximately 61%.

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