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GEG moves launch of Galaxy Macau Phase 4 earlier by one year

October 3, 2023 Macau Casino & Hotel

According to financial services company Jefferies, Galaxy Entertainment Group (GEG) is thinking about rescheduling Galaxy Macau Phase 4’s launch from 2027 to 2026. After the Phase 3 inauguration of Galaxy Macau was delayed, the adjustment happened. Phase 4 will now have 1,600 bigger, higher-quality rooms, focused on the premium mass market, as opposed to the 2,500 rooms that were originally intended to be added to the Cotai integrated resort. With this modification, 7,500 rooms are now available.

Considering GEG’s solid financial position and anticipated earnings recovery to 2019 levels, Jefferies analyst Andrew Lee expects dividend distributions to increase for GEG over the medium to long term. GEG has space to enhance dividends with net cash of around HK$12 billion (US$1.53 billion) and cash and bonds of about HK$13.2 billion (US$1.69 billion).

Earnings have been increasing gradually, and it is anticipated that Phase 3 will bring them closer to levels seen in 2019. In contrast to the industry average of 15%, VIP gaming accounts for just 12% of Galaxy’s gross gaming revenue (GGR), mostly from direct VIP and players residing outside of mainland China. This indicates that the premium mass sector is doing well.

After the inauguration of Raffles, premium mass tables will resume their pre-pandemic levels, and Lee predicts that GEG’s revenues will rise even more as Macau continues to be a popular international destination. Future dividend payments are assured by the company’s strong financial condition and earnings recovery.