Melco International Development (SEHK:200): Exploring Valuation After House of Dancing Water Wins TITAN Brand Awards

Melco International Development (SEHK:200) is in focus after its House of Dancing Water production earned top honors for brand awareness and marketing at the 2025 TITAN Brand Awards. Outstanding social media engagement has captured investors’ interest.

See our latest analysis for Melco International Development.

Melco International Development’s recent accolades have added fresh energy to its shares, reflected in a robust 41% total return over the last year. Short-term momentum has been somewhat mixed; however, the long-term story is showing renewed promise as investors respond to heightened brand visibility and creative expansion.

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With a solid year of returns and new brand momentum, is Melco’s stock trading at an attractive discount, or have investors already factored in all the upside from its creative resurgence and improved outlook?

Price-to-Sales of 0.3x: Is it justified?

At a price-to-sales ratio of just 0.3x, Melco International Development stands out as potentially undervalued compared to both its industry and peer group. The latest close was HK$4.78, a figure significantly below both peer and sector averages.

The price-to-sales ratio compares a company’s market capitalization to its revenue, making it especially relevant for businesses in turnaround or early-growth phases that may not yet be profitable. In hospitality, where profit margins can be cyclical, the price-to-sales metric helps assess whether the market values each dollar of revenue appropriately.

Melco’s ratio is not only dramatically lower than the peer group average of 2.1x; it also undercuts the Hong Kong Hospitality industry average of 0.6x. Strong comparative value is further supported by a fair ratio estimate of 1.8x, which highlights a wide margin for potential market realignment if fundamentals continue to improve.

Explore the SWS fair ratio for Melco International Development

Result: Price-to-Sales of 0.3x (UNDERVALUED)

However, ongoing net income losses and recent share price volatility could challenge Melco’s recovery if revenue growth or brand momentum slows.

Find out about the key risks to this Melco International Development narrative.

Another View: Our DCF Model Challenges the Market’s Pessimism

While the price-to-sales ratio suggests Melco International Development is deeply undervalued, our SWS DCF model points to an even bigger disconnect. It implies the stock trades well below its estimated fair value. This suggests a possible opportunity, but raises the question: has the market overlooked something, or is it pricing in risks that traditional multiples may miss?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Melco International Development for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 924 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Melco International Development Narrative

If you see the numbers differently or want your own perspective, it's easy to dive into the data and form your own view in just a few minutes. Do it your way

A great starting point for your Melco International Development research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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