CICC: Maintains MELCO INT'L DEV (00200) outperformance rating with a target price of HK$5.60.

CICC released a research report stating that the basic MELCO INT'L DEV (00200) EBITDA forecast for 2026 and 2027 remains unchanged. The firm maintains an outperform industry rating and a target price of 5.60 Hong Kong dollars, representing a 30% upside potential from the current stock price. Taking into consideration the market's concerns about Melco Resorts & Entertainment Ltd. Sponsored ADR's additional payment of trademark licensing fees to MELCO INT'L DEV has been digested, the firm has upgraded the rating of Melco Resorts & Entertainment Ltd. Sponsored ADR (MLCO.US) to outperform industry, while maintaining a target price of 8.20 US dollars, corresponding to 8.6 times 2026 EV/EBITDA, with a 39% upside potential from the current stock price. CICC's main points are as follows: Progress in projects in Sri Lanka and Cyprus The opening of City of Dreams Mediterranean in Sri Lanka in August 2025, after two quarters of climbing, is expected to accelerate its growth. The firm expects the project to contribute approximately $13.13 million in EBITDA increment for Melco Resorts & Entertainment Ltd. Sponsored ADR in 1Q26. The firm believes that the market has not fully factored in its contribution, and it is expected to gradually reflect in the coming quarters. Continuous increase in market share of total gaming revenue for City of Dreams in Macau Driven by strong performance of high-end and VIP customer groups, the firm expects its total gaming revenue market share to increase from 9.4% in 4Q25 to 10.1% in 1Q26. Takings benefit from the closure of satellite gaming areas, Studio City International Holdings Ltd. Sponsored ADR Class A and Studio City's gaming revenue market share has exceeded expectations. In 1Q26, the firm observed that some original satellite gaming customers began to shift demand to Studio City International Holdings Ltd. Sponsored ADR Class A and Studio City, benefiting from the similar low minimum bet levels of the gaming tables in these properties. Therefore, the firm expects the mid-tier business performance to be better than expected. Difference with the market: The firm believes that the market has not fully reflected the progress of the Sri Lanka project. Potential catalysts: Increasing market share of overseas business and projects in China and Macau. Risk factors: Slow progress in climbing new projects; intensifying competition leading to a decline in market share.