MGM China Earnings: Moving Beyond Recovery, but Limited Room Supply May Slow Growth Outlook

MGM China’s second-quarter results surprised the market with adjusted EBITDA of USD 209 million, 21% above its 2019 level. The strong second-quarter performance was also ahead of Macao peers; the casino saw a decent market share gain to 14.6% from 9.5% in 2019, with gross gaming revenue returning to 101% of 2019's level, outpacing the 62% recorded by the industry. We expect MGM China to extend its strong growth momentum in the second half, benefiting from a recent increase in table allocation, successful remodeling and renovation of gaming floors and suite products, and efforts to utilize data analytics and efficient marketing strategies. All these should help it to attract more quality customers and boost revenue.