股 票 研 [Table_Title] Company Report: Melco Resorts & Entertainment (MLCO US) Noah Hudson 究 (86755) 2397Hudson 6684 Equity Research 公司报告： 新濠博亚 (MLCO US) [email protected] 4 June 2019 [Table_Summary] 1Q19 Results In Line, Maintain "Buy" 2019 年第 1 季度业绩符合预期，维持“买入” 1Q19 luck-normalized adjusted property EBITDA was US$362 mn [Table_Rank] 公 (-12.0% yoy, -2.3% qoq), in line with market and our expectations. Total Rating: Buy VIP turnover declined sharply (-22.6% yoy, -15.1% qoq), while total mass Maintained 司 GGR recorded below-industry-average growth (+5.0% yoy, +0.9% qoq). 报 评级： 买入 (维持) We have adjusted upward our forecasts for Melco's 2019-2021 adjusted 告 property EBITDA by 2.5%, 1.9% and 3.4%, respectively. We expect that property enhancements at City of Dreams as well as the roll out of new 6[Table_Price-18m TP 目标价] : US$23.70 Company Report Company Revised from 原目标价: US$26.50 non-gaming attractions at Studio City will increase the Company's competitiveness and further drive growth. We have adjusted downward ADR price ADR价格: US$18.810 slightly our revenue forecasts as we expect some negative impact to operations while property renovations are being undertaken. However, we expect higher EBITDA margin as Melco's non-VIP segments now contribute Stock performance more than 90% of Melco's luck-adjusted EBITDA (excluding Philippines). We 股价表现 forecast 2019-2021 adjusted property EBITDA of US$1.6 bn, US$1.7 bn and [Table_QuotePic] US$1.8 bn, respectively, representing 7.1% CAGR. 20 % change We lower our target price from US$26.50 to US$23.70 on lower sector 10 valuation and maintain our "Buy" investment rating. We believe the 0 证 current sector valuation is (justifiably) pricing in macro-economic risks, (10) 券 告 including trade war tension, as well as the underperformance of Macau's VIP (20) 研 报 sector so far this year. However, we think Melco is relatively well positioned (30) as it continues to rely less on the VIP sector and more so on mass and 究 究 premium mass. Our new target price is equivalent to 8.9x forward (40) 报 研 EV/adjusted EBITDA. (50) 告 2019 年第 1 季度标准化赢率下经调整物业 EBITDA 为 3.62 亿美元（同比降 12.0%、环 (60) 券 Equity Research Report 比降 ），符合市场和我们的预期。贵宾转码数总额大幅下滑（同比降 、环比 2.3% 22.6% HSI Melco Resorts & Ent. 证 降 15.1%），而中场博彩收入总额录得低于行业平均的增长（同比增 5.0%、环比增 0.9%）。 我们分别上调新濠博亚 2019 至 2021 年经调整物业 EBITDA 预测 2.5%、1.9%和 3.4%。 [Tab 我们预计新濠天地的物业改善及新濠影汇新型非博彩项目的铺开，能提升公司的竞争力， Change[Table_PriceChange] in ADR Price 1 M 3 M 1 Y le_I 并进一步推动增长。由于预计物业翻新将会对运营产生一定负面影响，我们略微下调营收 股价变动 1 个月 3 个月 1 年 预测。但我们预计 EBITDA 利润率将会提升，因为非贵宾业务（不含菲律宾地区）目前向 Abs. % (25.7) (17.1) (41.1) nfo1 绝对变动 % 新濠博亚贡献超过 90%的标准化赢率下经调整物业 EBITDA。我们预计 2019 至 2021 年 Rel. % to NASDAQ Index 博 (15.6) (13.9) (37.5) ] 经调整物业 EBITDA 将分别达到 16 亿美元、17 亿美元和 18 亿美元，年复合增长率 7.1%。 相对纳指变动 % 彩 Avg. ADR price(US$) 21.2 23.1 21.7 平均股价（美元） 行 我们将目标价由 26.50 美元下调为 23.70 美元，以对应下降的行业估值，而投资评级则维 持“买入”。我们认为当前的行业估值中体现了宏观经济风险，包括中美贸易摩擦，以及 Source: Bloomberg, Guotai Junan International. 业 澳门贵宾博彩业务年初至今的疲弱表现。然而，我们认为新濠博亚相对处于有利位置，因 Gaming Sector 为其对贵宾业务的依赖持续减少，而对中场及高端中场的侧重则越来越多。我们新的目标 价相当于 8.9 倍预测经调整 EV/EBITDA。 [Tab le_I [Table_ Year End Turnover Net Profit Earnings/ADR Earnings/ADR PER BV/ADR PBR DP ADR Yield ROE nfo2 年结Profit ] 收入 股东净利 每份 ADR 净利 每份 ADR 净利变动 市盈率 每份 ADR 净资产 市净率 每份 ADR 股 股息率 净资产收益率 12/31 (US$ m) (US$ m) (US$) (△ %) (x) (US$) (x) (US$)息 (%) (%) ] 2017A 5,285 347 0.709 103.8 26.5 5.902 3.2 1.681 8.9 9.7 新 2018A 5,159 352 0.727 2.5 25.9 4.398 4.3 0.560 3.0 11.6 濠中 2019F 5,555 501 1.088 49.7 17.3 3.783 5.0 0.738 3.9 19.0 博 5,945 607 1.320 21.3 14.2 4.096 4.6 0.792 4.2 22.6 外 2020F 亚 2021F 6,373 715 1.554 17.7 12.1 4.665 4.0 0.777 4.1 23.4 运 [Table_BaseData]ADR in issue (m) 总 ADR 数 (m) 467.0 Major shareholder 大股东 Melco Intl. Development Ltd. 51.3% 输 Market cap. (US$ m) 市值 (US$ m) 8,784.6 Free float (%) 自由流通比率 (%) 37.5 3 month average vol. 3 个月平均成交股数 (‘000) 5,494.7 FY19 Net gearing (%) FY19 净负债/股东资金 (%) 235.7 52 Weeks high/low (US$) 52 周高/低 (US$) 51.910 / 25.000 FY19 Est. NAV (US$) FY19 每 ADR 估值（美元） 29.6 Source: the Company, Guotai Junan International. Melco Resorts & Entertainment (MLCO US) Melco Resorts & Entertainment See the last page for disclaimer Page 1 of 11 [Table_PageHeader]Melco Resorts & Entertainment (MLCO US) 1Q19 RESULTS ] 1 r a M t h g i R _ e l b a T [ Melco Resorts & Entertainment's ("Melco" or the "Company") 1Q19 VIP-luck-normalized adjusted property EBITDA was US$362 million (-12.0% yoy, -2.3% qoq), in line with Bloomberg consensus estimate and our forecast. Melco's VIP-luck-normalized adjusted property EBITDA was 1.1% above our forecast. Favorable VIP luck (high VIP win rate) boosted adjusted EBITDA by around US$46 million, resulting in adjusted property EBITDA of US$407 million (+1.2% yoy, -4.3% qoq), which was 13.7% above our last forecast. Adjusted property EBITDA margin was 30.1%, down 0.6 ppt yoy and 0.8 ppt qoq. Melco's non-VIP segments now contribute more than 90% of Melco's luck-adjusted EBITDA (excluding the Philippines). This 4 June 2019 highlights the importance of mass gaming and non-gaming segments in driving group-wide EBITDA and EBITDA margin. Shareholders’ net income decreased 25.1% yoy and 8.3% qoq to US$117 mn in 1Q19, negatively impacted by bad debt provision. Net revenue totaled US$1,362 million, up 3.7% yoy but down 2.5% qoq. Net income was negatively affected by bad debt provision of US$11 mn during 1Q19, as opposed to a bad debt reversal of US$3 mn in 1Q18. During 1Q19, earnings per ADR decreased by 20.2% yoy to US$0.255. Table-1: Melco's Financial Results US$ mn (unless indicated otherwise) 1Q18 2Q18 3Q18 4Q18 1Q19 qoq yoy (% or ppt) (% or ppt) ] 2 r a M t h g i R _ e l b a T [ Gaming revenue 1,154 1,070 1,030 1,211 1,177 (2.8%) 2.0% Room revenue 68 68 86 90 84 (6.1%) 24.4% Entertainment, retail, F&B & other revenue 92 91 104 96 101 5.1% 10.4% Total Net Revenue 1,313 1,229 1,220 1,396 1,362 (2.5%) 3.7% Shareholders' net income 157 57 10 128 117 (8.3%) (25.1%) Earnings per ADR, basic (US$) 0.320 0.117 0.020 0.274 0.255 (7.1%) (20.2%) Earnings per ADR, diluted (US$) 0.317 0.115 0.020 0.273 0.254 (7.1%) (19.8%) (MLCO US) Adjusted Property EBITDA City of Dreams 208 172 147 230 229 (0.5%) 9.9% 新濠博亚 Altira Macau 18 18 (1) 20 15 (24.3%) (15.1%) Mocha Clubs 7 5 5 5 6 27.7% (13.5%) City of Dreams Manila 59 87 55 68 61 (10.9%) 2.9% Studio City 110 73 89 103 96 (6.1%) (12.4%) Total Adjusted Property EBITDA 402 356 295 425 407 (4.3%) 1.2% Adjusted Property EBITDA Margins City of Dreams 32.5% 29.7% 24.5% 31.7% 32.0% 0.3 ppt (0.4) ppt Altira Macau 15.0% 14.9% (1.1%) 14.7% 11.5% (3.2) ppt (3.5) ppt Mocha Clubs 22.8% 18.6% 16.1% 17.7% 19.3% 1.6 ppt (3.5) ppt Melco Resorts & Entertainment City of Dreams Manila 41.4% 50.2% 39.0% 43.8% 42.5% (1.3) ppt 1.1 ppt Studio City 29.9% 23.3% 25.9% 30.1% 29.2% (1.0) ppt (0.7) ppt Total Adjusted Property EBITDA Margin 30.6% 28.9% 24.2% 30.4% 29.9% (0.6) ppt (0.7) ppt Source: the Company, Guotai Junan International. Note: Mass market share includes gaming tables and slot machines. Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, pre-opening costs, development costs, property charges and other, share-based compensation, payments to the Philippine parties under the cooperative arrangement (the “Philippine Parties”), land rent to Belle Corporation and other non-operating income and expenses. Melco’s 1Q19 total VIP turnover decreased 22.6% yoy (-15.1% qoq) to US$20.2 bn, led by a sharp decline at Studio City, where the Company plans to close the VIP business by January 2020. Excluding the Philippines, Melco’s total VIP turnover plummeted to US$17.9 billion (-23.2% yoy, -16.4% qoq), worse than the Macau sector VIP gross gaming revenue ("GGR") decline (-13.4% yoy, -11.4% qoq). The decline in Melco's total VIP GGR was mainly led by Studio City, whose VIP turnover decreased by nearly 59.1% yoy. But thanks to a higher-than-normal company-wide VIP win rate of 3.50% (+0.6 ppt yoy, +0.2 ppt qoq), which was beyond the expected range of 3.00% to 3.30%, Melco’s total VIP win declined less significantly (-8.0% yoy, -11.2% qoq) to US$700 million.