Galaxy sees stabilizing player reinvestment

The management of casino operator Galaxy Entertainment Group Ltd (GEG) has indicated in a recent conference call with investment analysts that the trend of elevated player reinvestment in the Macau market has now stabilized, after seeing a rise, particularly in the premium-mass segment.

GEG has reported group-wide adjusted earnings before interest, taxation, depreciation, and amortization (EBITDA) of nearly HKD3.18 billion for the second quarter, up 11.6% sequentially.

According to Seaport Research Partners analyst Vitaly Umansky, “Galaxy did intensify player reinvestment in mass – we estimate 150 basis points – but this came with meaningful share gain, and corresponding EBITDA gains.”

The company’s management also said the ongoing crackdown on Macau money touts was “not having any material impact on the business,” as “most players have access to liquidity and revenues should not be impacted by government initiatives with respect to this activity.”

Despite a “very competitive environment” in Macau, Melco Resorts & Entertainment Ltd.’s management said player reinvestment had not accelerated in the April to June period, though it remained high.

“We’re probably at an elevated period in the history of the market and it will eventually unwind and come down,” stated Evan Winkler, Melco Resorts president.

GEG was Macau’s biggest market share gainer in the June quarter, with its share jumping from 17.3% in Q1 to 18.9% in Q2.

JP Morgan analysts estimate the company’s share edged up further to around 19.5% in 3Q24 to date, “which should serve as some cushion for industry-wide uncertainty amid a frustratingly poor macro/consumption backdrop.”

“We upgrade Galaxy from Neutral to Overweight following its sizable underperformance year-to-date, with a June 2025 price target of HKD43 that suggests 45%+ potential upside,” the analysts said. Victoria Chan