HK Stock Market Move | Gambling stocks collectively rise, MGM China (02282) up over 6% JP Morgan believes gambling stocks are in excessive correction.

The collective rise of gambling stocks, as of the time of publication, MGM CHINA (02282) rose by 6.49% to HK $10.32; Sands China (01928) rose by 4.13% to HK $17.14; Melco International Development (00200) rose by 3.9% to HK $4; SJM Holdings (00880) rose by 3.43% to HK $2.41. On the news front, MGM CHINA announced that in the fourth quarter of 2024, net income was $1 billion, up 4% from $983 million in the same quarter last year, mainly due to an increase in win rates resulting in higher casino revenue compared to the previous year; and EBITDAR for the quarter adjusted for segments was $255 million, down 3% from $262 million in the same quarter last year. For the full year of 2024, net income was $4 billion, up 28% from $3.2 billion the previous year; and adjusted EBITDAR for the year was $1.1 billion, up 25% from $867 million the previous year. In addition, Morgan Stanley stated that Sands China will hold a board meeting next Friday (February 21) to consider proposing a dividend, the first time in five years. The timing of the potential dividend is earlier than the bank's current forecast, therefore it can be seen as a slight positive. However, the bank does not have high expectations for a large dividend payout this year. The bank believes that Macau gambling stocks have been oversold (down 12% since the beginning of the year, while the Hang Seng Index has risen 6%), but establishing a market sentiment bottom before the market expectations are fully reset remains challenging. Currently, the bank continues to prefer Galaxy Entertainment and MGM China.