Earnings forecasts and valuation
We cut our 2026/2027/2028 EBITDA forecasts by 11%/11%/11% to HKD7.5/8.0/8.3bn, reflecting potential policy pressure on the VIP business, VIP wagering contraction in 3Q26, and higher premium service spending. We apply 7.5x 2027E EV/EBITDA (previous: 8.2x 2026E), vs the Hong Kong-listed gaming sector’s average 2027E EV/EBITDA of 7.7x (previous: 8.4x 2026E) on Bloomberg consensus, considering the company's continued expansion in premium mass but with new projects still under construction. Our target price is HKD4.87 (previous: HKD6.10). Maintain OVERWEIGHT.
Risks: policy implementation missing our expectations, estimation errors, and intensifying competition in overseas gaming markets.