JP Morgan: Galaxy Entertainment (00027) is expected to gradually increase its dividend in the future, maintaining a "buy" rating and seeing it as a top pick in the industry.

JPMorgan released a research report stating that GALAXY ENT (00027) announced its full-year performance ending in December last year, with fourth-quarter performance beating market expectations, market share increasing by 160 basis points to 21.7% quarter-on-quarter, and profit expanding by 29% quarter-on-quarter. The final dividend of HK$0.8 per share implies a dividend payout ratio of 61% for the 2025 fiscal year, showing stable performance as expected by JP Morgan. However, for some investors hoping for a higher dividend payout ratio, they may be slightly disappointed with the dividend. JPMorgan maintains its "overweight" rating on the entertainment sector, considering it as the top stock pick; The target price is HK$52, and holds a "selective" view on this sector. JPMorgan pointed out that no particular negative factors were found in the performance. However, the final dividend of HK$0.8 for the entertainment sector will bring the total dividend payout to HK$1.5 for the 2025 fiscal year, which may leave some bullish investors slightly disappointed. Based on recent discussions with investors, JPMorgan expects that some investors originally hoped for a larger increase and anticipates that future dividends will gradually increase, with possibly good news to be announced when the 2026 midterm performance is released in August.