Citibank: Gives "Buy" rating to GALAXY ENT (00027), target price of HK$62.5

Citigroup released a research report stating that GALAXY ENT (00027) third-quarter revenue increased by 11% to 10.67 billion yuan year-on-year, and adjusted EBITDA increased by 6% to 2.94 billion yuan year-on-year, exceeding expectations. The company management is exploring a major upgrade at the Star World Hotel in Macau, including the main casino lobby, lobby arrival experience, and dining choices. With the completion of the upgrade on the third floor of the Star World Hotel in Macau, the on-site gaming terminal has become one of the largest in Macau. The bank has a "buy" rating for the company, with a target price of 62.5 Hong Kong dollars. The bank stated that the renovation of Macau Galaxy Geneva is progressing smoothly, and the non-gaming-focused Phase IV is also underway. Management reiterated that the 17-story Geneva is expected to open in the middle of next year, including 100 sky villas and suites. Management emphasized the focus on the development of Phase IV, which will include several new high-end hotel brands in Macau, a theater that can accommodate up to 5,000 people, extensive dining and retail facilities, non-gaming amenities, landscaping, water recreation areas, and a casino. Phase IV is expected to be completed by 2027, with a total development area of approximately 600,000 square meters. The report mentioned that management stated that the concert held by movie star Andy Lau at the Galaxy Variety Hall during the peak season attracted additional customers, and they believe that the Ultimate Fighting Championship (UFC) in the fourth quarter of 2024 will also be popular. Galaxy Macau opened a new high-limit gaming area at the end of September, and the management stated that the group will continue to introduce smart gaming terminals and reiterated that a comprehensive guideline will be launched by the end of 2024.