[ET Net News Agency, 9 January 2018] Citi Research lifted its target price for Melco
International Development (00200) to HK$33 from HK$28 after marking Melco's interest in
Melco Resorts & Entertainment (MLCO) to market, and maintained its "buy" rating.
The research house raised its FY2018-19 earnings forecasts by 10-22% reflecting its
latest GGR forecasts. It said the improvement in Chinese consumption trends was probably
the single largest driver for revenue recovery over the past 12-18 months.
With Macau being the only legal gaming jurisdiction in China, it is unsurprising that
the improving consumption trends have led to GGR recovery since mid-2016, Citi said.
Macau's Premium Mass and VIP will continue to benefit from such trends. Hence, it raised
its 2018 GGR growth forecast from +7% to +16%.
Citi forecast MLCO to report 4Q 2017 revenue of US$1,369m (+15% YoY but -1% QoQ) and
adjusted EBITDA of US$354m (+30% YoY but -3% QoQ). It expects CoD's EBITDA to fall 15% QoQ
to US$209m with a normalized VIP hold. EBITDA at Studio City is expected to remain stable
QoQ at US$96m. It anticipated CoD Manila to achieve a record high EBITDA of US$64m (+28%
YoY and +12% QoQ). (KL)