HSBC Global Research lifted its target price for Melco International (00200) to HK$14.8 from HK$12.6 and maintained its "hold" rating.
The research house cut its FY2020 GGR growth rate forecast to -80% (from -64%). HSBC thinks near-term uncertainty in both supply and demand, especially from high-end segments, will cap the recovery pace.
HSBC said Melco International's ownership of MLCO (Melco Resorts & Entertainment) is now 56.8% post recent share repurchase, versus 55.8% as of FY2019 end. Higher ownership gives Melco international a higher degree of exposure to casino operations and should help Melco International to narrow its holding discount. It cut Melco's FY2020 and FY2021 EBITDA by 135% and 31%, respectively.
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