MGM China (MCHVY) AI Stock Analysis

• Market Cap: $7.69B
• Dividend Yield: 3.99%
• Average Volume (3M): 0.00
• Price to Earnings (P/E): 14.1
• Beta (1Y): 0.14
• Revenue Growth: 5.99%
• EPS Growth: -4.03%
• Country: US
• Employees: 13,327
• Sector: Consumer Cyclical
• Sector Strength: 80
• Industry: Gambling, Resorts & Casinos
• EPS (TTM): 0.97
• Shares Outstanding: 318,221,700
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 0
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.08
• Enterprise Value/Revenue: 0.27
• Enterprise Value/Gross Profit: 0.70
• Enterprise Value/Ebitda: 1.04
• 1Y Price Target: $29.00
• Price Target Upside: 20.03% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 78 Outperform
• Price Target: $29.00 ▲(20.03% Upside)

MGM China's stock is rated positively, driven by strong financial performance and bullish technical indicators. The valuation is attractive, with a low P/E ratio and a solid dividend yield enhancing its appeal. However, high leverage and an overbought RSI suggest caution is warranted.

MGM China Business Overview & Revenue Model

Company Description

MGM China Holdings Limited, an investment holding company, engages in the development, ownership, and operation of gaming and lodging resorts in the Greater China region. The company develops and operates casino games of chance and other casino games, and related hotel and resort facilities, as well as provides hotel management services; and develops integrated resorts in Macau. It owns and operates MGM Macau, an integrated resort that includes a casino with 845 slot machines and 289 gaming tables; a hotel with 585 hotel rooms, suites, and villas; and amenities, including 8 restaurants, retail outlets, pool, and spa facilities, as well as a convention space. The company also owns MGM Cotai, a resort that consists of a casino with 839 slot machines and 263 gaming tables; a hotel with 1,418 hotel rooms, suites, and skylofts; 12 restaurants and bars; retail outlets; and a meeting space, as well as other non-gaming offerings. In addition, MGM China Holdings Limited is involved in the provision of outsourcing services, including information technology, accounting, human resources, hotel reservation, and convention consultation. The company was incorporated in 2010 and is headquartered in Macau. MGM China Holdings Limited is a subsidiary of MGM Resorts International Holdings, Ltd.

How the Company Makes Money

MGM China generates revenue primarily through its gaming operations, which include table games, slot machines, and other gaming activities. The company earns income from both VIP and mass-market gaming segments, with the VIP segment often contributing a significant portion of its revenue. In addition to gaming, MGM China also derives income from its hotel and resort operations, including room bookings, food and beverage sales, and entertainment events. The company benefits from strategic partnerships with junket operators, who bring high-stakes gamblers to its properties. Furthermore, MGM China's focus on premium offerings and exceptional guest experiences helps to drive customer loyalty and repeat visits, contributing to its overall revenue growth.

MGM China Financial Statement Overview

Summary

MGM China's financial performance is strong with robust revenue growth and profitability margins, indicating solid operational performance. However, the balance sheet shows high leverage, which poses a risk. Cash flow metrics are stable but there's room for growth in free cash flow generation.

Income Statement

MGM China has shown strong recovery in revenue from its pandemic lows, with a significant revenue growth rate of 27.15% in the latest year. The company has a healthy gross profit margin of 37.8% and a net profit margin of 14.7%, indicating operational efficiency and profitability. EBIT and EBITDA margins are also robust at 19.6% and 25.6%, respectively. The positive trajectory in revenue and profitability metrics signals strong performance in a recovering market.

Balance Sheet

The balance sheet presents a mixed picture with a high debt-to-equity ratio due to significant debt levels, evidenced by total debt far exceeding stockholders' equity. However, the return on equity is an impressive 873.2%, driven by recent profitability. The equity ratio is low at 1.7%, highlighting a reliance on debt financing, which could pose a risk in volatile market conditions despite the recent improvement in equity position.

Cash Flow

Cash flow analysis shows a strong operating cash flow to net income ratio of 1.8, indicating good cash generation efficiency. The free cash flow to net income ratio is also favorable at 1.5. However, the free cash flow growth rate is negative at -10.7%, suggesting some constraints on cash flow growth. Overall, the cash flow position is solid, but the company should focus on maintaining and improving free cash flow generation.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	31.39B	24.68B	5.27B	9.41B	5.10B
Gross Profit	11.87B	19.67B	-419.99M	1.58B	-516.17M
EBITDA	8.02B	6.39B	-1.69B	-287.02M	-1.73B
Net Income	4.60B	2.64B	-5.23B	-3.85B	-5.20B
Balance Sheet
Total Assets	30.60B	29.18B	31.21B	28.44B	29.67B
Cash, Cash Equivalents and Short-Term Investments	5.32B	4.23B	6.71B	3.11B	2.64B
Total Debt	23.15B	24.30B	32.92B	24.15B	21.37B
Total Liabilities	30.08B	30.51B	35.21B	27.24B	24.65B
Stockholders Equity	527.53M	-1.33B	-4.00B	1.20B	5.02B
Cash Flow
Free Cash Flow	7.07B	7.91B	-2.41B	-977.32M	-3.81B
Operating Cash Flow	8.27B	8.27B	-2.11B	-449.61M	-2.97B
Investing Cash Flow	-1.52B	-124.64M	-1.32B	-518.49M	-831.96M
Financing Cash Flow	-5.66B	-10.62B	7.04B	1.44B	3.16B

MGM China Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 24.16
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MCHVY, the sentiment is Neutral. The current price of 24.16 is below the 20-day moving average (MA) of 24.25, above the 50-day MA of 23.34, and above the 200-day MA of 17.45, indicating a neutral trend. The MACD of 0.33 indicates Positive momentum. The RSI at 52.09 is Neutral, neither overbought nor oversold. The STOCH value of 71.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MCHVY.

MGM China Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MCHVY	78 Outperform	$7.69B	14.08	452.88%	3.99%	5.99%	-4.03%
WYNN	68 Neutral	$13.05B	37.01	-51.73%	0.81%	-1.94%	-53.90%
MGM	65 Neutral	$10.59B	21.00	17.34%	―	0.89%	-31.56%
Sector *	61 Neutral	$17.96B	13.14	-5.29%	3.00%	1.25%	-13.95%
LVS	59 Neutral	$39.13B	28.79	49.16%	1.72%	1.62%	-7.14%
MLCO	58 Neutral	$3.90B	74.32	25.40%	―	12.51%	―
CZR	52 Neutral	$5.38B	―	-4.76%	―	-0.15%	28.05%