JP Morgan: Sands China (01928) will consider recommending dividend payout next week. Continues to prefer Galaxy Entertainment (00027) and MGM China (02282).

Morgan Stanley published a research report stating that Sands China (01928) will hold a board meeting next Friday (February 21) to consider proposing dividends, which would be the first time in five years. The potential timing of the dividend is earlier than the bank's current forecast, so it can be seen as a slight positive. Among Macau casino stocks, the bank continues to prefer GALAXY ENT (00027) and MGM CHINA (02282). However, the bank's expectation for a large dividend this year is not high. It is expected that the first round of dividends will be cautious, at 0.25 Hong Kong dollars per share for each half-year (or 0.5 Hong Kong dollars for the full year of 2025), meaning a yield of over 3% at the current level; although better than none, it may not have a significant impact on the stock price. The bank still believes that as the company continues to deleverage, the size of dividends may increase annually, hoping to return to the pre-pandemic level of 1.99 Hong Kong dollars per year within 4 to 5 years (if achieved, this would mean a yield of 12.5% at the current level). Yesterday, Macau casino stocks fell sharply, averaging a 3.5% decline, while the Hang Seng Index fell by 1%. Morgan Stanley finds this somewhat perplexing, as there were no other news besides the weekly update on gaming revenue from yesterday (which was actually better than expected). The bank also did not discover any news from multiple operators they inquired with. Some investors pointed out downgrades from two brokerage firms, but this occurred over the weekend and did not affect stock prices the day before yesterday. The bank attributes yesterday's correction to "capital flows" and "market sentiment," as well as the continued downward impact from market forecasts. The bank believes that Macau casino stocks have overcorrected (down 12% since the beginning of the year, while the Hang Seng Index is up 6%), but establishing the market sentiment bottom before the market expectations are completely reset remains challenging.