Citi lowered its target price for Wynn Macau (01128) to HK$18 from HK$19 and maintained its "buy" rating.
The research house said they lowered the TP to reflect the lowered target multiple and our lowered GGR and EBITDA forecasts. They still have a buy rating on Wynn Macau but it is now their least preferred Macau stock. Its strength in Premium Mass should remain the key earnings driver for the operator. However, they continue to believe that Wynn, with ~50% of its 2019E GGR coming from VIP (highest among the six operators), will likely be exposed to even higher risks of VIP market share losses because it is the only operator paying below-market junket commission rates. Junkets will likely direct more business volumes from Wynn to other operators paying market commission rate in order to maximize profits.
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