Citigroup slightly raised target price of MGM China, rating kept at Buy

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Citigroup viewed the quarter-on-quarter drop of 1 percentage point in MGM China’s market share in the second quarter as satisfactory, considering the significant ramp-up in hotel guest room supply on the market and the Blackpink and Jacky Cheung concerts at rival casinos.

MGM China’s EBITDA margin stood at 30.1% in Q2, ahead of the broker’s forecast of 26.5%, and it’s believed that the group’s plan to expand its sales team will help contain the market share loss at the minimum, it said.

Given the estimate-beating Q2 earnings and higher profit margin assumptions, the broker lifted the target price on MGM China from HK$13 to HK$14, with rating kept at Buy.