Macquarie: Gives SJM Holdings (00880) a "Buy" rating with a target price of HK$3.

, Macquarie released a research report stating that it gives a "buy" rating to SJM HOLDINGS (00880) with a target price set at 3 Hong Kong dollars. The third-quarter performance of Sands China meets expectations. Excluding the luck factor in the VIP room, the company expects EBITDA for the period to be 993 million yuan, in line with the company's and the market's general expectations. The company's adjusted EBITDA profit margin for the period is about 13.8%, growing by approximately 110 basis points quarterly, mainly driven by positive operational leverage. Gaming revenue (excluding satellite casinos) grew by around 12% quarterly; GGR (excluding satellite casinos) in the mass market segment grew by approximately 7% quarterly, primarily due to growth in operations at the Grand Lisboa Palace (GLP) in Macau, with market share increasing by 40 basis points to approximately 2.6% quarterly. UBS mentioned that the increase in business volume and employee recruitment at Sands China drove costs up in the third quarter, increasing by around 5% quarterly; operating expenses were 2.09 million yuan per day, but the trend is still lower than the company's expectations. Promotional allowances and commissions grew by approximately 8% quarterly, slightly lower than the growth in gaming revenue (excluding satellite casinos), partly due to higher VIP room win rates than expected.