DB:M04

Stock Analysis Report

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Executive Summary

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.


Snowflake Analysis

Good value with proven track record.


Similar Companies

Share Price & News

How has MGM China Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: M04's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-2.9%

M04

10.4%

DE Hospitality

2.0%

DE Market


1 Year Return

-31.7%

M04

-39.2%

DE Hospitality

-2.6%

DE Market

Return vs Industry: M04 exceeded the German Hospitality industry which returned -43.8% over the past year.

Return vs Market: M04 underperformed the German Market which returned -3.9% over the past year.


Shareholder returns

M04IndustryMarket
7 Day-2.9%10.4%2.0%
30 Day-10.6%16.4%8.4%
90 Day-21.1%-38.2%-7.3%
1 Year-30.9%-31.7%-37.0%-39.2%-1.0%-2.6%
3 Yearn/a-55.4%-61.4%-6.6%-13.9%
5 Yearn/a-54.3%-63.9%1.1%-11.7%

Price Volatility Vs. Market

How volatile is MGM China Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is MGM China Holdings undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: M04 (€1.01) is trading below our estimate of fair value (€2.76)

Significantly Below Fair Value: M04 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: M04 is good value based on its PE Ratio (17.5x) compared to the Hospitality industry average (22.1x).

PE vs Market: M04 is good value based on its PE Ratio (17.5x) compared to the German market (18.7x).


Price to Earnings Growth Ratio

PEG Ratio: M04 is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: M04 is overvalued based on its PB Ratio (3.2x) compared to the DE Hospitality industry average (1.8x).


Next Steps

Future Growth

How is MGM China Holdings forecast to perform in the next 1 to 3 years based on estimates from 20 analysts?

13.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: M04's forecast earnings growth (13.8% per year) is above the savings rate (0.2%).

Earnings vs Market: M04's earnings (13.8% per year) are forecast to grow slower than the German market (21.7% per year).

High Growth Earnings: M04's earnings are forecast to grow, but not significantly.

Revenue vs Market: M04's revenue (3.3% per year) is forecast to grow slower than the German market (5.6% per year).

High Growth Revenue: M04's revenue (3.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: M04's Return on Equity is forecast to be high in 3 years time (20.6%)


Next Steps

Past Performance

How has MGM China Holdings performed over the past 5 years?

-26.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: M04 has high quality earnings.

Growing Profit Margin: M04's current net profit margins (8.5%) are higher than last year (5.6%).


Past Earnings Growth Analysis

Earnings Trend: M04's earnings have declined by -26.3% per year over the past 5 years.

Accelerating Growth: M04's earnings growth over the past year (80.7%) exceeds its 5-year average (-26.3% per year).

Earnings vs Industry: M04 earnings growth over the past year (80.7%) exceeded the Hospitality industry -36.2%.


Return on Equity

High ROE: M04's Return on Equity (18.5%) is considered low.


Next Steps

Financial Health

How is MGM China Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: M04's short term assets (HK$4.1B) do not cover its short term liabilities (HK$5.2B).

Long Term Liabilities: M04's short term assets (HK$4.1B) do not cover its long term liabilities (HK$16.8B).


Debt to Equity History and Analysis

Debt Level: M04's debt to equity ratio (158.7%) is considered high.

Reducing Debt: M04's debt to equity ratio has increased from 66.1% to 158.7% over the past 5 years.

Debt Coverage: M04's debt is well covered by operating cash flow (26.1%).

Interest Coverage: M04's interest payments on its debt are well covered by EBIT (3.2x coverage).


Balance Sheet


Next Steps

Dividend

What is MGM China Holdings's current dividend yield, its reliability and sustainability?

1.99%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: M04's dividend (1.99%) is higher than the bottom 25% of dividend payers in the German market (1.35%).

High Dividend: M04's dividend (1.99%) is low compared to the top 25% of dividend payers in the German market (4.05%).


Stability and Growth of Payments

Stable Dividend: M04 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: M04 has only been paying a dividend for 7 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (34.8%), M04's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: M04's dividends in 3 years are forecast to be well covered by earnings (46.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

0.8yrs

Average management tenure


CEO

Grant Bowie (61yo)

no data

Tenure

HK$46,667,000

Compensation

Mr. Grant R. Bowie serves as the Chief Executive Officer of MGM China Holdings Limited (Alternate name - MGM Resorts China Holdings Limited). Mr. Bowie has been the President of MGM Grand Paradise Limited  ...


CEO Compensation Analysis

Compensation vs Market: Grant's total compensation ($USD6.02M) is above average for companies of similar size in the German market ($USD2.68M).

Compensation vs Earnings: Grant's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Grant Bowie
CEO & Executive Directorno dataHK$46.67mno data
Xiaofeng Feng
President2yrsHK$2.24mno data
William Hornbuckle
Executive Chairperson0.17yrno datano data
Zhi Qi Wang
President of Hospitality & CFO8.83yrsno datano data
Antonio Jose De Castro Dos Santos Menano
Company Secretaryno datano datano data
Yuen Ying Yu
Executive Vice President of Human Resourcesno datano datano data
Chiu Ho
Executive Director9.67yrsno data22.49% HK$901.2m
Chen Wong
Executive Director9.67yrsno datano data
Michael Holubowskyj
Senior Vice President of Security & Safetyno datano datano data
John McManus
Executive Director1.17yrsno datano data

0.8yrs

Average Tenure

54.5yo

Average Age

Experienced Management: M04's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Grant Bowie
CEO & Executive Directorno dataHK$46.67mno data
Xiaofeng Feng
President2yrsHK$2.24mno data
William Hornbuckle
Executive Chairperson0.17yrno datano data
Chiu Ho
Executive Director9.67yrsno data22.49% HK$901.2m
Chen Wong
Executive Director9.67yrsno datano data
John McManus
Executive Director1.17yrsno datano data
James Freeman
Non-Executive Director0.75yrno datano data
Sun Zhe
Independent Non-Executive Director9.67yrsHK$863.00kno data
Sze Wan Lam
Independent Non-Executive Director9.17yrsHK$863.00kno data
Russell Banham
Independent Non-Executive Director5.5yrsHK$1.18mno data

7.3yrs

Average Tenure

54.5yo

Average Age

Experienced Board: M04's board of directors are considered experienced (7.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

MGM China Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: MGM China Holdings Limited
  • Ticker: M04
  • Exchange: DB
  • Founded: 2010
  • Industry: Casinos and Gaming
  • Sector: Consumer Services
  • Market Cap: HK$33.858b
  • Listing Market Cap: HK$4.007b
  • Shares outstanding: 3.80b
  • Website: https://www.mgmchinaholdings.com

Number of Employees


Location

  • MGM China Holdings Limited
  • Edificio MGM Macau
  • Avenida Dr. Sun Yat Sen
  • Macau
  • Macau

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
2282SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJun 2011
MCHV.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJun 2011
M04DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 2011
2282SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJun 2011
2282SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJun 2011
MCHV.YOTCPK (Pink Sheets LLC)UNSPONSOD ADRUSUSDMay 2012

Biography

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 engages in the development and operation of casino games of chance and other casino games, and related hotel and resort facilities, as well as in the provision of hotel management services; and the development of integrated resorts in Macau. As of December 31, 2019, it owned and operated MGM Macau, an integrated resort that includes a casino with 1,085 slot machines and 290 gaming tables; a hotel with 582 hotel rooms, suites, and villas; and amenities, including 8 restaurants, retail outlets, pool, and spa facilities, as well as a convention facility. The company also owned MGM COTAI, a resort that consists of a casino with 1,154 slot machines and 262 gaming tables; a hotel with 1,390 suites and villas; 12 restaurants and bars; retail outlets; and 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 operates as a subsidiary of MGM Resorts International Holdings, Ltd. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/05/25 22:58
End of Day Share Price2020/05/25 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.