Key Takeaways
SJM Holdings Ltd. (HK:0880) swung to a net loss of HK$62 million in the first quarter of 2026 as net gaming revenue fell 22.8 percent from a year earlier.
The results reflect a "softer gaming revenue environment" and heightened competition in Macau, with the most recent analyst rating on the stock being a Sell with a HK$1.80 price target, according to TipRanks data.
Total net revenue for the three months ending March 31 was HK$5.90 billion, down 21.1% from the prior year. Net gaming revenue fell to HK$5.36 billion from HK$6.95 billion. Adjusted EBITDA declined 4.3% to HK$917 million, though the adjusted EBITDA margin improved to 15.5% from 12.8% a year ago.
The swing to a loss underscores the intense competitive pressure facing operators in the world's largest gaming hub. While the company ended the quarter with HK$3.41 billion in cash, it carried HK$30.21 billion in debt, highlighting a leveraged balance sheet as it navigates the challenging market.
Performance at the company’s flagship properties was mixed. The Grand Lisboa Palace Resort Macau saw its Adjusted Property EBITDA fall to HK$58 million on gross revenue of HK$2.07 billion. In contrast, the older Grand Lisboa Macau property generated relatively stable Adjusted Property EBITDA of HK$425 million from HK$2.00 billion in gross revenue.
The results come as the Macau market sees new developments, including the recent launch of Bee Macau, the city's first major playing card factory, a venture involving APE Holdings and Cartamundi. This move aims to localize the supply chain for Macau's six major gaming operators, including SJM, potentially altering long-term operational costs.
The decline in top-line revenue, despite better margins, suggests SJM may be losing ground to rivals. Investors will be watching the company's ability to stabilize revenue at its key properties and manage its significant debt load in the coming quarters.
This article is for informational purposes only and does not constitute investment advice.
