Maintaining Macau Gaming Revenue Forecasts as We Reduce Table Allocations for MGM China and SJM

Fourth Quarter Adjusted EBITDA at MGM China Beat on Better Luck; Gaming Performance Weaker

Buy MGM China Amid Share Price Pullback and Ahead of the Opening of MGM Cotai

Upgrading 2017 Macau Gaming Revenue Growth to 6%; Policy Risks Prevent Robust Recovery

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

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Morningstar, Inc.

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Equity Bottom-Up

<p>Narrow-moat <a href="https://www.smartkarma.com/entities/472" target="_blank" data-smartkarma-citation="entities:472:1">MGM China Holdings Ltd (2282 HK)</a>'s fourth-quarter revenue was 5% higher than our estimate, while adjusted EBITDA beat our estimate by 11%. The fourth-quarter margin beat was due to the casino playing lucky. The VIP win rate was 3.11%, higher than our assumed theoretical win rate of 2.85%, and the mass hold rate of 170 basis points was higher than our estimate, which was based on the average of the seven preceding quarters. As a result, we maintain MGM China’s fair value estimate at…</p>

Narrow-moat MGM China Holdings Ltd (2282 HK)'s fourth-quarter revenue was 5% higher than our estimate, while adjusted EBITDA beat our estimate by 11%. The fourth-quarter margin beat was due to the casino playing lucky. The VIP win rate was 3.11%, higher than our assumed theoretical win rate of 2.85%, and the mass hold rate of 170 basis points was higher than our estimate, which was based on the average of the seven preceding quarters. As a result, we maintain MGM China’s fair value estimate at…

MGM Cotai’s Early Performance Appears Strong; MGM China 4Q Results Beat Our Estimate