JP Morgan: Macau's gambling industry continues to improve and is expected to continue into the first quarter of next year.

J.P. Morgan has released a research report stating that the momentum of the Macau gaming industry continues to improve, with total revenue reaching a strong record high again. In November, total gaming revenue increased by 14% year-on-year, reaching 21.1 billion Macau patacas, which is 92% of the pre-epidemic level, marking the best recovery since the epidemic. With improved visibility of profitability and an expanding investor base, the bank believes that there is significant room for upward adjustment of industry valuations in the coming quarters. The bank's investment ranking is: Sands China (01928) and Galaxy Entertainment (00027)Wynn Macau (01128) and MGM China (02282)Melco Resorts & Entertainment Ltd. Sponsored ADR (MLCO.US)SJM Holdings (00880)Melco International Development (00200). J.P. Morgan now expects that gaming revenue in December will increase by more than 15% year-on-year, with potential for further upward adjustments or growth of more than 20%. The bank believes that if this target is achieved, the year-on-year growth of Macau gaming revenue in the fourth quarter of this year will reach 15-16%, with a quarterly growth of 5-6%, marking the best quarter in six years, far exceeding the bank's and market's expectations of about 12% year-on-year growth. The bank is optimistic about Macau gaming stocks in 2026. Despite market expectations, the accelerating growth of gaming revenue in December is expected to boost short-term market sentiment. Additionally, Sands China is expected to double its dividend per share in February, and MGM China may increase its dividend payout ratio in March, reflecting operators' strong confidence in sustainable growth of profitability and cash flow. The bank predicts that, benefiting from the low base effect, the growth momentum is expected to continue into the first quarter of next year.