Galaxy Entertainment Group (GEG) has reported impressive financial results for the June 2024 quarter. The company’s Gross Gaming Revenue (GGR) increased by 7.4% sequentially, reaching HK$10.3 billion (US$1.32 billion). This growth reflects GEG’s ability to drive revenue despite a challenging economic environment. Additionally, Adjusted EBITDA saw a substantial rise of 12.0%, totaling HK$3.18 billion (US$408 million). This enhancement in profitability underscores GEG’s operational efficiency and effective cost management.
Market Share Growth
The second quarter of 2024 also marked a significant boost in GEG’s market share, which rose from 17.3% in Q1 to 18.9% in Q2. This increase is notable across both mass and VIP gaming segments. Contributing factors include the recent opening of new gaming areas and the completion of upgrades at Galaxy Macau. These developments have likely attracted more patrons and bolstered revenue. Despite these gains, GEG’s market share still trails behind the 21% it held in 2019, providing a benchmark for evaluating future performance.
Competitive Position
In the context of Macau’s gaming market, GEG’s performance is notable but faces stiff competition. Sands China leads the market with a commanding 25% share as of Q2 2024. This positions Sands China as a key competitor in the industry. Additionally, GEG’s growth outpaced broader industry trends, with mass GGR up 7% compared to flat industry-wide growth and VIP GGR rising 20% versus the industry’s 15% to 20% growth range. These figures highlight GEG’s strong performance relative to market averages.
Future Prospects and Investment Potential
JP Morgan’s recent analysis has led to an upgrade of GEG’s rating from Neutral to OverWeight, citing the company’s strong recent performance and potential for further gains. The investment bank has set a price target of HK$43 for June 2025, suggesting a potential upside of over 45%. This optimistic outlook reflects GEG’s ability to navigate current market uncertainties and capitalize on its recent investments. Despite overall bearish sentiment in the Macau gaming sector, GEG is considered a promising option for both long-term investors and hedge funds. The company’s recent advancements and strategic initiatives make it a top pick in the region, alongside MGM China.
Galaxy Entertainment Group’s recent financial performance and market share growth underscore its robust position in Macau’s competitive gaming market. With significant improvements in revenue and profitability, as well as strategic expansions and upgrades, GEG is well-positioned for future growth. While the market remains challenging, GEG’s resilience and potential offer a positive outlook for investors. The company’s recent success and strategic positioning highlight its capacity to thrive amidst industry competition and economic uncertainties.