MGM China (MCHVY) AI Stock Analysis

• Market Cap: $8.12B
• Dividend Yield: 3.93%
• Average Volume (3M): 0.00
• Price to Earnings (P/E): 14.7
• Beta (1Y): 0.32
• Revenue Growth: 5.99%
• EPS Growth: -4.03%
• Country: US
• Employees: 13,327
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Gambling, Resorts & Casinos
• EPS (TTM): N/A
• Shares Outstanding: 316,666,660
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 0
• PEG Ratio: 0.11
• Price to Book (P/B): 69.92
• Price to Sales (P/S): 1.18
• P/FCF Ratio: 5.22
• Enterprise Value/Market Cap: 7.98
• Enterprise Value/Revenue: 2.03
• Enterprise Value/Gross Profit: 5.39
• Enterprise Value/Ebitda: 8.10
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: $28.00 ▲(13.64% Upside)

MGM China demonstrates strong financial performance with robust revenue growth and profitability, though high leverage remains a risk. Technical indicators suggest bullish momentum, but overbought signals indicate potential for a short-term correction. The valuation is attractive with a reasonable P/E ratio and a solid dividend yield, making it a compelling investment in the gambling and resorts sector.

Positive Factors

Revenue Growth

Strong revenue growth indicates successful recovery and market demand, enhancing long-term business prospects and competitive positioning.

Profitability Margins

High profitability margins reflect operational efficiency and ability to sustain earnings, supporting long-term financial stability.

Cash Generation

Efficient cash generation supports ongoing operations and strategic investments, crucial for sustaining growth and financial health.

Negative Factors

High Leverage

Reliance on debt financing increases financial risk, potentially impacting flexibility and stability in volatile market conditions.

Free Cash Flow Constraints

Negative free cash flow growth suggests challenges in cash flow management, which could limit investment capacity and growth potential.

EPS Decline

Declining EPS indicates potential profitability challenges, which could affect investor confidence and long-term earnings growth.

MGM China Business Overview & Revenue Model

Company Description

MGM China Holdings Limited (MCHVY) is a leading integrated resort and casino operator based in Macau, a premier destination for gaming and entertainment in Asia. The company operates the MGM Macau and MGM Cotai resorts, which provide a wide range of gaming and non-gaming amenities, including hotels, restaurants, retail shops, and entertainment venues. MGM China aims to enhance its offerings by creating a vibrant environment that attracts both tourists and local residents.

How the Company Makes Money

MGM China generates revenue primarily through its gaming operations, which include table games, slot machines, and electronic gaming. The majority of revenue comes from the gaming segment, particularly from VIP gaming and mass market table games. Additionally, MGM China earns income from non-gaming sectors, including hotel accommodations, dining, retail shopping, and entertainment events hosted at its resorts. The company has also formed strategic partnerships with various brands and entertainment companies to enhance its offerings and attract a wider audience. Factors contributing to its earnings include the overall health of the tourism industry in Macau, consumer spending patterns, and the regulatory environment for gaming in the region.

MGM China Financial Statement Overview

Summary

MGM China's financial performance shows a promising recovery trajectory, with robust revenue growth and profitability margins indicating strong operational performance. While the balance sheet shows high leverage, recent profitability has improved returns on equity, though reliance on debt remains a risk. Cash flow metrics are stable, albeit with room for growth in free cash flow generation. Overall, MGM China is on a solid path forward, with careful management of leverage and cash flows being critical to sustaining growth.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	31.83B	31.39B	24.68B	5.27B	9.41B	5.10B
Gross Profit	12.01B	11.87B	19.67B	1.65B	1.58B	-516.17M
EBITDA	7.99B	8.02B	6.39B	-1.69B	-287.02M	-1.73B
Net Income	4.30B	4.60B	2.64B	-5.23B	-3.85B	-5.20B
Balance Sheet
Total Assets	30.86B	30.60B	29.18B	31.21B	28.44B	29.67B
Cash, Cash Equivalents and Short-Term Investments	5.52B	5.32B	4.23B	6.71B	3.11B	2.64B
Total Debt	21.82B	23.15B	24.30B	32.92B	24.15B	21.37B
Total Liabilities	28.90B	30.08B	30.51B	35.21B	27.24B	24.65B
Stockholders Equity	1.97B	527.53M	-1.33B	-4.00B	1.20B	5.02B
Cash Flow
Free Cash Flow	6.71B	7.07B	7.91B	-2.41B	-977.32M	-3.81B
Operating Cash Flow	8.47B	8.27B	8.27B	-2.11B	-449.61M	-2.97B
Investing Cash Flow	-1.84B	-1.52B	-124.64M	-1.32B	-518.49M	-831.96M
Financing Cash Flow	-6.33B	-5.66B	-10.62B	7.04B	1.44B	3.16B

MGM China Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 24.64
• 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 Positive. The current price of 24.64 is below the 20-day moving average (MA) of 25.06, above the 50-day MA of 24.12, and above the 200-day MA of 20.94, indicating a neutral trend. The MACD of 0.04 indicates Positive momentum. The RSI at 48.79 is Neutral, neither overbought nor oversold. The STOCH value of 47.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MCHVY.

MGM China Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LVS	74 Outperform	$45.27B	30.21	62.28%	1.49%	8.37%	10.20%
MCHVY	70 Outperform	$8.12B	14.68	452.88%	3.93%	5.99%	-4.03%
MGM	63 Neutral	$10.20B	235.72	2.25%	―	0.05%	-94.07%
WYNN	62 Neutral	$13.30B	28.22	―	0.79%	-0.26%	-44.45%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
MLCO	56 Neutral	$3.12B	30.40	―	―	11.32%	―
CZR	51 Neutral	$4.98B	-21.78	-6.06%	―	0.87%	31.28%