[ET Net News Agency, 5 December 2018] UBS Global Research cut its target price for SJM
Holdings (00880) to HK$7.5 from HK$8 and maintained its "neutral" rating.
The research house lowered its Macau gaming sector GGR growth assumptions from 5% to -1%
YoY for 2019, given more cautious VIP and premium mass outlooks.
UBS believes SJM could benefit from increased visitation to Macau but is unlikely to
offset Macau Peninsula's continued share loss to Cotai (37% in 2018 to 32% in 2020). It
thinks potential outperformance of SJM would be highly related to Grand Lisboa Palace
(2020 opening), which is subject to a high degree of forecasting error against a weak
macro backdrop.
SJM is trading on 13.7x 2019 EV/EBITDA versus a historical average of 8.1x and the
sector's 12.8x 2019. UBS thinks the risk/reward at present is balanced. (KL)