JP Morgan: Galaxy Entertainment Group (00027) in Macau gaming stocks is the first to be focused on for alpha investment opportunities.

JPMorgan Chase released a research report stating that the target prices for SJM Holdings (00880) and Melco International Development (00200) have been downgraded to 2.5 Hong Kong dollars and 4.1 Hong Kong dollars respectively, with a rating of "Neutral" and "Underweight." The target prices for Wynn Macau and Sands China have also been lowered to 7.5 Hong Kong dollars and 21.5 Hong Kong dollars, with a "Overweight" rating maintained. The report mentioned that the performance of Macau's casino revenue in the fourth quarter of last year was the best in 20 consecutive quarters, and the current industry valuation is low at around 9 times the average EBITDA. Therefore, they are focusing on individual stocks for alpha investment opportunities, with Galaxy Entertainment (00027) being their top pick, followed by MGM China (02282). They believe that MGM China's market share and EBITDA growth in the fourth quarter of last year can surpass its peers. Currently, JPMorgan maintains its stock selection order for Macau gaming stocks as Silver Entertainment, MGM China, Wynn Macau (01128), Sands China (01928), SJM Holdings (00880), and Melco International Development. Various casino operators will announce their fourth quarter performance at the end of this month to early March. JPMorgan predicts that industry EBITDA could grow by 2% to 3% per quarter, with profit margins remaining flat. They expect Silver Entertainment and MGM China to come out as winners, with their market shares increasing by 0.9 and 0.8 percentage points per quarter respectively, while Sands China and Aoba will lose market share.