Macau’s SJM seeks global investors amid “renaissance”

SJM Holdings Ltd., the parent company of Macau concessionaire SJM Resorts S.A., aims to expand its global investor base, according to CBRE Equity Research. This move is part of its “renaissance” strategy and the ongoing recovery of the Macau gaming market.

CBRE analysts John DeCree and Max Marsh shared this assessment after meeting with SJM’s Chief Financial Officer, Christopher Ip, to discuss the company’s future prospects.

In a Tuesday note, the analysts highlighted that SJM has historically received the least coverage among Macau’s six concessionaires, particularly from investors outside Hong Kong. However, they noted, “This is poised to improve, with the new CFO proactively introducing the company to investors globally.

“SJM is actively engaging the investment community and has a Renaissance story in the making,” they added. “Under Managing Director Daisy Ho and new management, SJM is institutionalizing the business, repositioning Grand Lisboa Palace to better serve base mass customers, increase visitation, and find operating efficiencies. These initiatives include improving retail tenant occupancy, adding new F&B outlets, new marketing efforts, and cross-asset cooperation.”

The company is capitalizing on the Macau recovery story and its resilience despite China’s economic slowdown. While investor concerns have suppressed Macau gaming stocks, mainland support for its SAR, as evidenced by the addition of 10 new cities to the Individual Visit Scheme, is a positive sign.

“Investors are cautious about China’s economic outlook. However, the continued GGR recovery in Macau through May suggests less correlation to the Chinese economy,” DeCree and Marsh noted.

“Macau isn’t immune to China’s slowing economic growth, but it has proven resilient. Two factors drive this: pent-up leisure demand in China post-lockdown and Macau’s low mass market penetration in China, which should increase with relaxed visa policies and improved travel capacity.”

Following recent meetings, CBRE raised its target price for SJM shares from HK$2.50 to HK$4.00, noting that while SJM’s initiatives will take time, “we see green shoots for SJM.”

Original Story by: IAG