Financial Analysis on Galaxy Entertainment Group

Table of Contents
Introduction 3
Financial Ratios with industry comparison 3
Financial Ratios 8
Analysis 10
Macau Gaming Market Analysis 11
GEG’s Outlook 12
Risks 12
Recommendation 15
Reference 16

Introduction
Galaxy Entertainment Group (GEG), wholly owns Galaxy Casino S.A., a gaming concessionaire that received a gaming concession from the Macau SAR government from 2002 to 2022. As of today, GEG owns and operates StarWorld Hotel and City Club Casinos in Macau. GEG is developing an integrated leisure and entertainment resorts in Cotai – Galaxy Macau. Opened on May 2011. GEG (0027.HK) was listed on the main board of Hong Kong Stock Exchange in 1991. GEG’s management has delivered outstanding results in the past and has demonstrated impressive strategic moves at critical moments. GEG make more independent decisions for the long-term benefit of the company and shareholders. GEG obtained the approval for the largest contiguous land bank in Macau for gaming. And the capacity expansion has been typically accomplished by borrowings, without diluting shareholders returns. Their willingness to take risk and add capacity paid off, with exponential growth in shareholder’s equity. GEG’s conservation of resources has proved its long-term oriented strategy, which we see is an important asset for GEG’s further outperformance

Financial Ratios with Industry Comparison
Sands China and SJM’s Holdings are the good industry comparison for GEG as they are the top three operators with combined market share of 61 percent the whole Macao gaming industry. In 2011 the market leader was SJM Holdings with a 29 percent share and GEG and Sands China both have 16 percent respectively. There are key similarities among all three operators.
 Location - Sands China and GEG with casinos operating on Cotai Strip currently with landbank
 Market Share – Mass market revenue and VIP market share in 2011
 VIP market – SJM’s 28%; GEG’s 18%;