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Macquarie initiated coverage on Galaxy Entertainment Group Limited (OTCPK:GXYEF) in its latest look at the Macau gaming sector.
Galaxy is noted to be the gaming operator in Macau with the largest pipeline of hotel rooms for 2023 to 2025, which is expected to be a strong traffic driver as the casino recovery continues.
In addition, analyst Linda Huang and her team think Galaxy’s control over expenses and net cash position should allow the company to maintain its margin leadership vs peers.
Looking ahead, Huang thinks Galaxy (OTCPK:GXYEF) should see an increasing gross gaming revenue contribution from the mass segment given its room and retail additions with the opening of Galaxy phases 3 and 4.
“We expect a continued shift of GGR contribution from VIP/ Mass/Slot machines to 11%/83%/6% in 2023E, from 47%/49%/4% in 2019. The resumption of group tours in May 2023 should add to its grind mass traffic, given its tourist-friendly properties such as Broadway Macau Food Street.”
Shares of Galaxy Entertainment (OTCPK:GXYEF) dipped 0.09% in Hong Kong trading on Wednesday.