SJM Earnings: Market Share Edged Up, but Ramp-Up of GLP Is Still Lagging

Narrow-moat SJM's second-quarter performance was largely in line with our and the market's expectations, with market share in gross gaming revenue edging up to 12.6% from 12.4% a quarter ago. Management indicated a further uptick of its GGR market share to 13.5% in July. We believe this encouraging uptick is mainly driven by a robust performance at the firm's Peninsula asset, the flagship Grand Lisboa, while the share of its new Cotai property, the Grand Lisboa Palace rose moderately to 2.5% in July from 2.2% in the second quarter, trailing its midterm target of 5% by 2026. We slightly raise our 2024 revenue forecast by 4% to HKD 28.3 billion to reflect a stronger-than-expected sales growth outlook at GL into the second half, offset by a higher operating expense assumption amid intense competition. Our long-term forecasts remain unchanged, and we maintain our fair value estimate at HKD 4.68 per share.