Rushing to finish before concession expires
Phase III of Galaxy Macau will likely be delayed until the middle of 2020 due to delays in securing government approvals, according to Union Gaming analyst Grant Govertsen. Govertsen said construction on the development has “largely maxed out for the time being” pending the approvals. The project originally was slated to open in late 2019. Govertsen added that design work on Phase IV continues, reported Inside Asian Gaming.
Despite the delay, Union Gaming calls Galaxy “the best operator in the market today.” Galaxy saw its net revenues grow 6 percent year-on-year to HK$13 billion (US$1.657 billion) and adjusted EBITDA 10 percent to HK$3.9 billion (US$497 million) in the third quarter of 2018, with both mass and VIP performing well.
According to GGRAsia, Galaxy Entertainment Chairman Lui Che Woo said in May he thought that at least “part” of Phase III would open next year, before the company’s Macau gaming concession expires in 2022. Phase III is expected to feature 1,500 hotel rooms, a casino and a 16,000-seat arena.
Galaxy reported third-quarter adjusted EBITDA of HKD3.9 billion (US$497.5 million), a 10 percent year-on-year increase, on net revenue that grew 6 percent to HKD13 billion. Union Gaming and Sanford Bernstein both said the third-quarter results were in line with expectations.
Union Gaming maintains its “buy” rating for shares in Galaxy Entertainment but reduced its price target to HKD57 a share from HKD84 because of the delay in the expansion of the Galaxy Macau. Bernstein has a “market perform” rating for the stock and a target price of HKD62.75.
